German Cartel Office gives green light to Gothaer-Barmenia merger

The German Federal Cartel Office has approved the planned merger between Cologne-based Gothaer and Barmenia from Wuppertal to create one of Germany’s biggest multi-line insurers.

Andreas Mundt, president of the office, said: “The intended merger of Barmenia and Gothaer is one of the largest mergers in recent years on the German insurance markets. However, a serious impairment of competition is not to be expected. There are numerous and sometimes significantly larger competitors in Germany on the various insurance markets.”

Barmenia and Gothaer both offer their customers a wide range of insurance products and are active in life insurance, private health insurance, property and casualty insurance and, to a lesser extent, reinsurance. In geographical terms, both groups generate their annual premium income, totalling over €7bn, largely in Germany.

“As a result of the merger plan, Barmenia and Gothaer will become one of the larger German insurance companies. However, their market shares in the various insurance markets will remain at a competitively harmless level even after the merger. This also applies to the areas in which the two companies are particularly active, such as private health insurance or property and accident insurance,” said the cartel office.

“After the merger, Barmenia and Gothaer will be the sixth-largest provider of private health insurance in Germany. Some of the significantly larger providers in the various insurance markets include the Allianz Group, the Munich Re Group, the Debeka Insurance Group, the R+V Insurance Group and the Talanx Insurance Group,” it added.

In a joint statement published on 6 March ahead of the Cartel Office approval, Oliver Schoeller, chairman of the board of Gothaer Finanzholding AG, and Barmenia CEO Andreas Eurich said: “The due diligence has largely been completed and the results have once again strengthened us in our joint project.”

They added that the group will be headed by two insurance associations, including Barmenia Gothaer Finanzholding AG, under which the various risk carriers will be located.

The pair said that personal insurers in joint group will be merged in a multi-stage plan. Eurich explained that this process will be carried out in close coordination with the German insurance supervisor BaFin. “Experience from other mergers shows that we are talking about a period of around three years before the actual merger,” he said.

According to the current plan, the merger is expected to be completed this year, probably at the end of the third or beginning of the fourth quarter.

Eurich explained the strategic rationale for the merger. “We want to become stronger and better together. Better for our customers, for our sales partners and, above all, for our employees.”

Schoeller added: “Both companies complement each other perfectly. Barmenia has its particular strength in health insurance, Gothaer is very strong in the composite sector. Gothaer is growing across all divisions, particularly in the corporate customer sector, while Barmenia is showing very dynamic development in the private customer business.”

“We will be able to offer our sales partners a very balanced product portfolio in the future and will further strengthen our resilience and risk-bearing capacity. The merger will also increase our investment power. Together we are creating something new,” the two CEOs agreed.