Insurance giant Allianz has denied that it has ambitions to complete a major merger or acquisition (M&A) deal, saying that no deals are on the horizon.
Allianz also said at a day for investors and analysts held this week that they are not in discussion with any of the companies mentioned in recent speculation about their appetite for a major acquisition.
Analysts at J.P. Morgan said that Allianz broke its normal policy of ‘no comment’ on M&A deal speculation, as the firm said there is no large deal in the pipeline.
Allianz said it has not hired any investment bank to look at a large M&A deal on its behalf and that it is not in talks with any of the companies mentioned in recent press articles.
Allianz laid out its criteria for what might be a deal it would look at, with the highest priority being a return on investment.
The insurer said it would only look at non-life companies, as life insurance is off the table.
While it said it is not looking for a major M&A deal, bolt-on acquisitions are seen as likely, according to the analysts.
Allianz also said that the rumoured deals with specific companies did not make any strategic or financial sense to it. The insurer insisted on the need for a good strategic fit, highlighting issues with many of the companies that had been rumoured to be potential targets.
Allianz explained to the analysts that its strategic target is growth into U.S. P&C personal lines market share, but that as it has no exposure of its own there would be no basis for achieving synergies in a deal meaning it is hard to justify paying any significant deal premium.
The analysts concluded, “Both because Allianz said it and also because the math and the strategic rational do not work, is that a large deal is very unlikely for now. We believe this means the deal risk which is currently in the Allianz share price should diminish. The share price should recover due to this.”
