December 27, 2005
By EDGAR, “CORRESP” designation, with paper courtesy copies.
Mr. Jeffrey Riedler
Assistant Director,
Division of Corporation Finance,
Securities and Exchange Commission,
100 F Street, N.E.,
Washington, D.C. 20549.
Re: | Allianz Aktiengesellschaft | |
Amendment No. 1 to Registration Statement on Form F-4 | ||
File No. 333-128715 |
Dear Mr. Riedler:
On behalf of Allianz Aktiengesellschaft (“Allianz”) I am writing in response to the Staff’s comment of December 23, 2005 on Amendment No. 1 to the Registration statement on Form F-4 of Allianz, which was filed on December 12, 2005 (the “F-4”).
The following is Allianz’s response to the Staff’s comment:
1. | We note your response to comment two. Please provide us with the detailed calculations for your investment and income tests that link back to the financial information provided in the filing. Please confirm whether the total GAAP purchase price that will be allocated to target assets and liabilities acquired was used for the investment test given that it does not appear that the exchange ratio has been established at this point in time. Provide a calculation of the GAAP purchase price based on the terms of the deal including any potential contingent consideration. Please be aware that significance should measured using U.S. GAAP amounts. |
As requested, attached hereto is supplemental information detailing the calculations made by Allianz with respect to the investment and income tests under both IFRS and U.S. GAAP. The transaction in question is the acquisition of Allianz’s remaining 44% interest in RAS, for which the exchange ratio was publicly announced on September 11, 2005 as being between 0.153 and 0.161 Allianz shares per RAS share, and which was thereafter fixed on December 16, 2005 at 3 Allianz shares per 19 RAS shares (or approximately 0.1579). For purposes of the investment test, Allianz’s December 12, 2005 response to Comment 2 used a merger exchange ratio of 0.155, which was within the publicly-announced range,
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Mr. Jeffrey Riedler Securities and Exchange Commission |
along with the prices for the completed cash tender offer (which prices were also publicly announced in September, 2005) of Eur. 19 per RAS ordinary share and Eur. 55 per RAS savings share; as indicated in the attached, use of the final merger ratio only changes the investment test outcomes from 0.62% (IFRS) and 0.61% (U.S. GAAP) to 0.64% and 0.63%, respectively, in each case still well below the 20% threshold. The transaction did not involve any contingent consideration, and the attached indicates that the total purchase price will be € 2,734 million in respect of the cash tender offer (completed in November, 2005) plus 25,123,259 Allianz shares to be issued in connection with the merger on the basis of the final merger exchange ratio of 3 Allianz shares per 19 RAS shares. Further information on the transaction terms also appears in the F-4 on pages 43-48.
* * *
On behalf of Allianz, we would like to thank you for the cooperation you and the Staff are extending with the review of the F-4. Please do not hesitate to call me at (011) (331) 7304-5890 with any questions or comments on the foregoing.
Very truly yours, |
/s/ William D. Torchiana |
William D. Torchiana |
(Sullivan & Cromwell LLP) |
(Enclosures)
cc: | Paul M. Dudek, Esq. | |
Craig C. Olinger | ||
Vanessa Robertson | ||
James Atkinson | ||
Sonia Barros | ||
(Securities and Exchange Commission) | ||
Burkhard Keese | ||
Dr. Susanne Kanngiesser | ||
Dr. Rainer Husmann | ||
Jonathan A. Wismer | ||
Jon Nielsen | ||
Dr. Peter Hemeling | ||
(Allianz AG) |
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Mr. Jeffrey Riedler Securities and Exchange Commission |
Dr. Frank Ellenbürger, Partner – KPMG Deutsche Treuhand-Gesellschaft AG
Robert Overstreet, U.S. Filing Review Partner – KPMG LLP
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Attachment
Significance Test F4 Filing for RAS Merger | Allianz Group Accounting 27-12-2005 |
Contents
¨ Investment RAS | Investment Test (Final) | |||||
¨ Investment RAS | Investment Test (Preliminary) | |||||
¨ Assets RAS | Asset Test | |||||
¨ Income USGAAP | Income Test | |||||
¨ Income IFRS | Income Test |
Overview of Tests (US-GAAP)
Investment | RAS | 0.63 | % | ||
Asset | RAS | 7.58 | % | ||
Income US-GAAP | RAS | 13.93 | % | ||
Income IFRS | RAS | 14.91 | % |
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Investment Test - Final Exchange Ratio | Allianz Group Accounting 27-12-2005 |
Transaction Volume for acquired Share (44,33%) of RAS:
Current Investment: | RAS | 55.67 | % | 6,585 | Mio EUR | ||||
Acquired Investment: | 5,900 | Mio EUR | |||||||
Total Investment in RAS after Acquisition: | 12,485 | Mio EUR |
Acquired Investment (Details)
Tender Offer | 2,734 | |
Remaining RAS-Shares after TenderOffer | 159,113,971 | |
Exchange Ratio (3 AZ for 19 RAS) | 0.157894737 | |
Assumed Allianz StockPrice (in EUR) | 126 | |
Exchanged Allianz Shares | 25,123,259 | |
Acquisition Costs (in Mio EUR) | 3,166 | |
Total Acquisition Costs | 5,900 |
Group Consolidated Assets (Based on F-1 and F-121 of Form 20F 2004)
USGAAP | IFRS Reformatted | IFRS | |||||||||||||
2004 Mio EUR | 2003 Mio EUR | 2004 Mio EUR | 2003 Mio EUR | 2004 Mio EUR | 2003 Mio EUR | ||||||||||
Allianz Group | 1,011,330 | 924,622 | (1) | 976,179 | 919,586 | (1) | 990,318 | 933,213 | (2) | ||||||
without RAS | 940,107 | 861,499 | 905,103 | 856,546 | 919,242 | 870,173 | |||||||||
RAS | 71,223 | 63,123 | (4) | 71,076 | 63,040 | (3) | 71,076 | 63,040 | (3) |
Source: | (1 | ) | Form F4 Page F-136 | ||
(2 | ) | Form F4 Page F-4 | |||
(3 | ) | Form F4 Page F-157 | |||
RAS SubGroup Allianz IFRS StandAlone | |||||
(4 | ) | Figures from (3) plus Total Effect of US GAAP Adjustments on Equity (Form F4 Page F-208) |
Cross-Check with IFRS figures from RAS perspective (Italien IFRS)
RAS | 73,622 | — |
Comparison
A. Comparison of Allianz Group Consolidated Assets (without RAS) toTotal Investment (12.485 Mio EUR) in RAS after Acquisition
USGAAP | IFRS Reformatted | IFRS | ||||||||||||||||
Ratio 2004 | Ratio 2003 | Ratio 2004 | Ratio 2003 | Ratio 2004 | Ratio 2003 | |||||||||||||
RAS | 1.33 | % | 1.45 | % | 1.38 | % | 1.46 | % | 1.36 | % | 1.43 | % |
B. Comparison of Allianz Group Consolidated Assets (without RAS) toacquired Investment (5.900 Mio EUR) in RAS
USGAAP | IFRS Reformatted | IFRS | ||||||||||||||||
Ratio 2004 | Ratio 2003 | Ratio 2004 | Ratio 2003 | Ratio 2004 | Ratio 2003 | |||||||||||||
RAS | 0.63 | % | 0.68 | % | 0.65 | % | 0.69 | % | 0.64 | % | 0.68 | % |
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Investment Test - Preliminary Exchange Ratio | Allianz Group Accounting 12-12-2005 |
Transaction Volume for acquired Share (44,33%) of RAS:
Current Investment: | RAS | 55.67 | % | 6,585 | Mio EUR | ||||
Acquired Investment: | 5,743 | Mio EUR | |||||||
Total Investment in RAS after Acquisition: | 12,328 | Mio EUR |
Acquired Investment (Details)
Tender Offer | 2,734 | |
Remaining RAS-Shares after TenderOffer | 159,113,971 | |
Exchange Ratio | 0.155 | |
Assumed Allianz StockPrice (in EUR) | �� | 122 |
Exchanged Allianz Shares | 24,662,666 | |
Acquisition Costs (in Mio EUR) | 3,009 | |
Total Acquisition Costs | 5,743 |
Group Consolidated Assets (Based on F-1 and F-121 of Form 20F 2004)
USGAAP | IFRS Reformatted | IFRS | |||||||||||||
2004 Mio EUR | 2003 Mio EUR | 2004 Mio EUR | 2003 Mio EUR | 2004 Mio EUR | 2003 Mio EUR | ||||||||||
Allianz Group | 1,011,330 | 924,622 | (1) | 976,179 | 919,586 | (1) | 990,318 | 933,213 | (2) | ||||||
without RAS | 940,107 | 861,499 | 905,103 | 856,546 | 919,242 | 870,173 | |||||||||
RAS | 71,223 | 63,123 | (4) | 71,076 | 63,040 | (3) | 71,076 | 63,040 | (3) |
Source: | (1) | Form F4 Page F-136 | ||
(2) | Form F4 Page F-4 | |||
(3) | Form F4 Page F-157 | |||
RAS SubGroup Allianz IFRS StandAlone | ||||
(4) | Figures from (3) plus Total Effect of US GAAP Adjustments on Equity (Form F4 Page F-208) |
Cross-Check with IFRS figures from RAS perspective (Italien IFRS)
RAS | 73,622 | — |
Comparison
A. Comparison of Allianz Group Consolidated Assets (without RAS) toTotal Investment (12.328 Mio EUR) in RAS after Acquisition
USGAAP | IFRS Reformatted | IFRS | ||||||||||||||||
Ratio 2004 | Ratio 2003 | Ratio 2004 | Ratio 2003 | Ratio 2004 | Ratio 2003 | |||||||||||||
RAS | 1.31 | % | 1.43 | % | 1.36 | % | 1.44 | % | 1.34 | % | 1.42 | % |
B. Comparison of Allianz Group Consolidated Assets (without RAS) toacquired Investment (5.743 Mio EUR) in RAS
USGAAP | IFRS Reformatted | IFRS | ||||||||||||||||
Ratio 2004 | Ratio 2003 | Ratio 2004 | Ratio 2003 | Ratio 2004 | Ratio 2003 | |||||||||||||
RAS | 0.61 | % | 0.67 | % | 0.63 | % | 0.67 | % | 0.62 | % | 0.66 | % |
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Asset Test | Allianz Group Accounting 12-12-2005 |
Acquired Share of Total Assets
Current GroupShare | Acquired Share | Target Share | |||||||||||
RAS | 55.67 | % | + | 44.33 | % | = | 100.00 | % |
Group Consolidated Assets
USGAAP | IFRS Reformatted | IFRS | |||||||||||||
2004 Mio EUR | 2003 Mio EUR | 2004 Mio EUR | 2003 Mio EUR | 2004 Mio EUR | 2003 Mio EUR | ||||||||||
Allianz Group | 1,011,330 | 924,622 | (1) | 976,179 | 919,586 | (1) | 990,318 | 933,213 | (2) | ||||||
without RAS | 940,107 | 861,499 | 905,103 | 856,546 | 919,242 | 870,173 | |||||||||
RAS (100%) | 71,223 | 63,123 | (4) | 71,076 | 63,040 | (3) | 71,076 | 63,040 | (3) | ||||||
acquired Share (44,33%) | 31,573 | 27,982 | 31,508 | 27,946 | 31,508 | 27,946 |
Source: | (1) | Form F4 Page F-136 | ||
(2) | Form F4 Page F-4 | |||
(3) | Form F4 Page F-157 | |||
RAS SubGroup Allianz IFRS StandAlone | ||||
(4) | Figures from (3) plus Total Effect of US GAAP Adjustments on Equity (Form F4 Page F-208) |
Cross-Check with IFRS figures from RAS perspective (Italien IFRS)
RAS | 73,622 | — |
Comparison
A. Comparison of Allianz Group Consolidated Assets (without RAS) toacquired Share (44,33%) of RAS’s Total Assets
USGAAP | IFRS Reformatted | IFRS | ||||||||||||||||
Ratio 2004 | Ratio 2003 | Ratio 2004 | Ratio 2003 | Ratio 2004 | Ratio 2003 | |||||||||||||
RAS | 3.36 | % | 3.25 | % | 3.48 | % | 3.26 | % | 3.43 | % | 3.21 | % |
B. Comparison of Allianz Group Consolidated Assets (without RAS) to100% of RAS’s Total Assets
USGAAP | IFRS Reformatted | IFRS | ||||||||||||||||
Ratio 2004 | Ratio 2003 | Ratio 2004 | Ratio 2003 | Ratio 2004 | Ratio 2003 | |||||||||||||
RAS | 7.58 | % | 7.33 | % | 7.85 | % | 7.36 | % | 7.73 | % | 7.24 | % |
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Income Test (US-GAAP) | Allianz Group Accounting 12-12-2005 |
Net Income US-GAAP before Taxes, Extraordinary Items and Cumulative Effect of Changes in Accounting Principles
Source: | Form F4 Page 3 / Form 20F 2004, 2003 and earlier | |
Form F4 Page F-126 Condensed Income Statement Information |
Allianz Group | 2004 Mio EUR | 2003 Mio EUR | 2002 Mio EUR | 2001 Mio EUR | 2000 Mio EUR | 1999 Mio EUR | Average 00-04 Mio EUR | |||||||
Net Income US-GAAP | 2,881 | 2,245 | -1,260 | 4,246 | 6,519 | 2,870 | ||||||||
Income Taxes (Negative Sign = Tax Benefit) | 1,441 | -163 | -1,077 | -4,350 | -3,870 | 635 | ||||||||
Net Income US-GAAP before Taxes | 4,322 | 2,082 | -2,337 | -104 | 2,649 | 3,505 | 1,811 | |||||||
IFRS Net Income | 2,266 | |||||||||||||
+ IFRS Taxes (Reformatted) | 1,609 | |||||||||||||
+ US-GAAP-Adjustments (before Tax) | 407 | |||||||||||||
+ US-GAAP-Adjustments Minorities | 40 | |||||||||||||
= US-GAAP Net Income before Taxes | 4,322 |
Acquired Share
Current GroupShare | Acquired Share | Target Share | |||||||||||
RAS | 55.67 | % | + | 44.33 | % | = | 100.00 | % |
Earning from ordinary Activities before Taxes of acquired Entity
2004 Mio EUR | |||
Earnings from ordinary Activities before Taxes (IFRS) | 1,113 | (5) | |
Effect of US GAAP Adjustments before Taxes and Minorities | 43 | (5) | |
Earnings from ordinary Activities before Taxes (US-GAAP) | 1,156 |
Form F4 Page F-208
IFRS | Reco | USGAAP | ||||
Earnings | 1113 | 43 | 1156 | |||
Taxes | -293 | -1 | -294 | |||
Minorities | -144 | 4 | -140 | |||
Net Income | 676 | 46 | 722 | |||
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Acquired Share of Net Income before Taxes and before Minorities | 100% of Net Income before Taxes and before Minorities | Current Share of Net Income before Taxes and before Minorities | ||||||||||||||
2004 Mio EUR | 2004 Mio EUR | 2004 Mio EUR | ||||||||||||||
RAS | 44.33% | 512 | RAS | 100.00% | 1,156 | RAS | 55.67% | 644 |
Source: | (5) | Form F4 Page F-158 / F-208 | ||
RAS SubGroup Allianz IFRS StandAlone | ||||
Line Item: Earning from ordinary Activities before Taxes |
Comparison
A. Compare acquired Share of RAS Net Income to AZ Group Net Income (excludingacquired Share of Net Income from RAS)
Income Mio EUR | Ratio | ||||
AZ Group | 4,322 | ||||
- RAS Net Income (44,33%) | 512 | ||||
3,810 | |||||
RAS (44,33%) | 512 | 13.45 | % |
B. Compare acquired Share of RAS Net Income to AZ Group Net Income (excludingcurrent AZ Group Share of Net Income from RAS)
Income Mio EUR | Ratio | ||||
AZ Group | 4,322 | ||||
- RAS Net Income (55,67%) | 644 | ||||
3,678 | |||||
RAS (44,33%) | 512 | 13.93 | % |
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Income Test (IFRS) | Allianz Group Accounting 12-12-2005 |
Net Income IFRS before Taxes, Extraordinary Items and Cumulative Effect of Changes in Accounting Principles
Source: Form F4 Page 3 / AZ Group Consolidated Financial Statements 2004 and earlier
Allianz Group | 2004 Mio EUR | 2003 Mio EUR | 2002 Mio EUR | 2001 Mio EUR | 2000 Mio EUR | 1999 Mio EUR | Average 00-04 Mio EUR | |||||||
Net Income IFRS | 2,266 | 2,691 | -3,243 | 1,585 | 3,448 | 2,317 | ||||||||
Income Taxes (Positive Sign = Tax Benefit) | -1,662 | -249 | 1,073 | 1,106 | -170 | 1,513 | ||||||||
Net Income IFRS before Taxes | 3,928 | 2,940 | -4,316 | 479 | 3,618 | 804 | 2,193 | |||||||
Acquired Share
Current GroupShare | Acquired Share | Target Share | |||||||||||
RAS | 55.67 | % | + | 44.33 | % | = | 100.00 | % |
Earning from ordinary Activities before Taxes of acquired Entity
Acquired Share of Net Income before Taxes and before Minorities | 100% of Net Income before Taxes and before Minorities | Current Share of Net Income before Taxes and before Minorities | ||||||||||||||
2004 Mio EUR | 2004 Mio EUR | 2004 Mio EUR | ||||||||||||||
RAS | 44.33% | 493 | RAS | 100.00% | 1,113(3) | RAS | 55.67% | 620 |
Source: | (3) | Form F4 Page F-158 | ||
RAS SubGroup Allianz IFRS StandAlone | ||||
Line Item: Earning from ordinary Activities before Taxes |
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Comparison
A. Compare acquired Share of RAS Net Income to AZ Group Net Income (excludingacquired Share of Net Income from RAS)
Income Mio EUR | Ratio | ||||
AZ Group | 3,928 | ||||
- RAS Net Income (44,33%) | 493 | ||||
3,435 | |||||
RAS (44,33%) | 493 | 14.37 | % |
B. Compare acquired Share of RAS Net Income to AZ Group Net Income (excludingcurrent AZ Group Share of Net Income from RAS)
Income Mio EUR | Ratio | ||||
AZ Group | 3,928 | ||||
- RAS Net Income (55,67%) | 620 | ||||
3,308 | |||||
RAS (44,33%) | 493 | 14.91 | % |
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