Further to our announcement on 14 December, 2007, we are pleased to announce that we have completed all necessary steps to acquire Kiln Ltd. and its subsidiaries (“Kiln”) ("the Acquisition").
Following agreement with the management of Kiln, the Amalgamation was approved by more than 99 per cent of Kiln shareholders at a Special General Meeting held on 13 February, 2008. Having received all other necessary regulatory approvals, the Amalgamation application to the Bermudian authorities was completed on 10 March, 2008 in Bermuda. Kiln is now de-listed from the London Stock Exchange and has joined Millea Group as a wholly-owned subsidiary of Tokio Marine & Nichido Fire Insurance Co., Ltd. (“Tokio Marine & Nichido Fire Insurance”).
“I am delighted for all parties involved that we have now concluded this landmark deal” said Millea President Shuzo Sumi. “Millea and Kiln will now jointly explore strategic options to accelerate growth within Lloyd’s and beyond. Combining the local brand and expertise of Kiln with the financial strength and extensive global network of Tokio Marine allows us to offer our customers the highest standards of service, a broad range of products and deep expertise.”
Total consideration for the Acquisition is approximately GBP 442 million (JPY 95 billion, GBP1=JPY215, which is based on estimated average exchange rate for this Acquisition). Kiln's financials will be consolidated into the financial statements of Millea from FY 2008 onwards.
<Appendix>1. Kiln Ltd.・ Founded: 1962
・ Financial highlights （2006）
| | ￡ in millions |
| Gross written premium (*) | 429 |
| Post-tax profit | 44 |
| Total assets | 1,010 |
| Shareholder’s equity | 250 |
| Combined ratio | 77% |
| Return on equity | 20% |
(*)Geographical distribution of GWP：NAFTA including US 41%、UK10%、Other Europe 11%、Asia 9%、Others 29%
・ Capacity： ￡802 million
・ Fiscal year： January - December
・ Credit Rating(S&P)： A+（as Lloyd’s）
・ Number of Employees： 335
2. Lloyd’s- Lloyd’s, which originates from the 17th century, is the longest-standing and one of the most important insurance markets in the world.
- Insurance underwriting is carried out by a “Member”; an individual or corporate capital provider. Although previously capital providers were solely individuals, corporate members have been allowed since 1994. Nowadays, 85% of members are corporate members. When underwriting, a single or group of members form a “Syndicate” to share the underwritten risk. Management of syndicates, including underwriting decision-making is handled by a “Managing Agent”. The placing of insurance is done by a specially permitted “Lloyd’s Broker”.
- Now within Lloyd’s, 75 Syndicates underwrite risks in 200 or more countries and territories through 176 brokers. Gross premium and income before tax in 2006 were￡16.4 billion and ￡3.7 billion, respectively.
3. Acquisition Process- The Acquisition was implemented by Amalgamation under the Bermuda Companies Act, by merging Tokio Marine and Nichido Fire Insurance’s 100% owned Special Purpose Company called Tokio Marine Investment (Bermuda) (“TMIB”) and Kiln Ltd.
- Application for Amalgamation was submitted to Bermudian authorities and registered on 10 March.
- Tokio Marine and Nichido Fire Insurance shall pay consideration (150 pence in cash per share) to Kiln’s existing shareholders accordingly.
