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. Last Updated: 07/27/2016

Allianz Will Acquire Remaining AGF Shares

FRANKFURT -- Allianz, the largest insurer in Europe, announced Thursday that it would buy out the minority shareholders of its French subsidiary AGF for $12.6 billion, another step in a drive by Allianz's chief executive, Michael Diekmann, to reduce the complexity of his company.

Allianz will acquire the 42.4 percent of AGF that it does not already own for about $8.8 billion in cash and $3.8 billion in Allianz stock. The deal would give Allianz full control of AGF 10 years after first purchasing a majority stake.

"The transaction will create an opportunity for AGF shareholders to participate in the global growth perspectives of Allianz Group," said Jean-Philippe Thierry, chief executive of AGF and a member of the Allianz management board. "They will hold shares in an integrated financial services provider that is well positioned across all business lines."

Allianz will also purchase the 9 percent that it does not own of Allianz Leben, its German life insurance subsidiary, for about $900 million.

The buyouts are an outgrowth of a strategy that Allianz began last year to thin the thicket of shareholdings and supervisory boards that have made the company difficult to manage.

Last year, Allianz converted its legal form to a Societas Europae, a type of incorporation that was created by the European Union in 2004 to simplify corporate governance within the bloc. As part of that shift, Allianz bought out the minority shareholders in Riunione Adriatica di Sicurita for $7.3 billion and hinted that similar steps could follow elsewhere.

With the announcement, Allianz has taken much the same step in France and Spain. Because AGF owns slightly less than half of Allianz Seguros in Spain, and the Allianz group owns the rest, the two holdings will be united under Allianz SE.

Allianz, based in Munich, also said Thursday that it would buy out its partner in its Taiwan joint venture, Allianz President Life.

AGF is a central part of the Allianz empire, contributing more than 15 percent to the German company's premium income in life and health insurance and slightly over 20 percent to its property and casualty business.

Though the buyouts are costly, Diekmann has mostly won plaudits from shareholders, who came to understand that Allianz's structure hindered efforts to market products and share company expertise across national boundaries.