Agreement on the Merger of PTE Skarbiec-Emerytura and PTE PZU together with a commitment to sell the shares of the merger issue

Agreement on the Merger of PTE Skarbiec-Emerytura and PTE PZU together with a commitment to sell the shares of the merger issue

On 29 November 2005 BRE Bank SA – holder of 100% of shares in PTE Skarbiec-Emerytura pension fund –and PZU Życie S.A. – holder of 100% of shares in PTE PZU S.A. pension fund – entered into „Agreement on the Merger of PTE Skarbiec-Emerytura and PTE PZU together with a commitment to sell the shares of the merger issue.”. The parties set the maximum transaction price at the level of PLN 365 million and the minimum price was set at 315 PLN million. The transaction offers the opportunity to deliver significant benefits to members of the merged fund which are to result from, inter alia, larger scale of operations and good investment performance.

The merger of the two Companies is based on the acquisition of the assets of PTE Skarbiec-Emerytura by PTE PZU SA. After the merger the share of BRE Bank SA in the shareholders’ equity and votes in the General Meeting of PTE PZU will be 13.1% and the share of PZU Życie S.A. will be 86.9%. The Agreement also contains options whereby parties are obliged to buy (sell) all shares of the merger issue held by BRE Bank SA as a result of the merger of the two Companies.The transaction is subject to consent of the Insurance and Pension Funds Supervisory Commission and the Office of Competition and Consumer Protection.The price for the shares of the merger issue that will be held by BRE Bank SA was set at PLN 365 million subject to the adjustment of the said amount by the percentage change in the net assets of Skarbiec-Emerytura in  the period from 30 June 2005 to the day of merger between the pension companies plus PLN 15 million. The minimum price is PLN 315 million and remains binding until 31 August 2006. Thereafter the share price will be determined in accordance with the formula set out in the Agreement and will be tied to the percentage change in the net assets of Skarbiec-Emerytura in the period from 30 June 2005 to the merger date. The maximum price for shares of the merger issue due to BRE Bank will be PLN 365 million. In the event that the merger does not happen by 31 August 2006 BRE Bank has the right to terminate the Agreement.„The effects of the Agreement were reflected in the business targets for 2005 that were increased a month ago and envisaged meeting the financial target (gross profit) of around PLN 330 million” – says the President of the Management Board of BRE Bank – Sławomir Lachowski.The conditions of the negotiated agreement are beneficial not only to the parties of the transaction but most importantly to the pension fund itself and its members. Those benefits stem from – inter alia – a larger scale of operations of the merged fund and good investment performance of the managed portfolio.“I am convinced that the benefits of the transactions that accrue to both pension funds and their Clients will have a bearing on the decision about the merger issued by relevant authorities, as Insurance and Pension Funds Supervisory Commission and the Office of Competition and Consumer Protection. In accordance with strictly defined course of administrative proceedings we expect that the decision about the merger of the Pension Fund Companies will be issued in the first half of 2006” - S.Lachowski ends his statement.