In a significant move for the Swiss insurance sector, Baloise and Helvetia have announced their merger plans, unveiling a new entity that will be known as Helvetia Baloise Holding AG. This merger, termed a "merger of equals," was confirmed during a press conference on Tuesday morning, April 22, 2025, and is set to create the second-largest insurance group in Switzerland, boasting a combined market share of 20 percent.
The merger has been positively received by investors, with Helvetia shares rising by 4 percent and Baloise shares increasing by 3.4 percent on the stock exchange following the announcement. Together, the new entity will have a business volume of approximately 20 billion Swiss francs, covering operations across eight countries.
Thomas von Planta, the current chairman of Baloise, will assume the same role in the new company, while Fabian Rupprecht, the current CEO of Helvetia, will lead as the CEO of Helvetia Baloise. Matthias Henny, who is the CFO of Baloise, will take on the CFO position in the new organization. The headquarters will be located in Basel, with St. Gallen remaining an important site.
Despite the promising outlook, the merger raises concerns regarding potential job cuts. Both companies currently employ around 22,000 staff members combined, with 1,000 in St. Gallen and approximately 3,000 in Basel. Rupprecht confirmed that there will be job reductions, although the exact number is yet to be determined. "We are aware of the responsibility we have towards our employees," he stated during the press conference. The companies aim to handle job cuts through natural attrition and early retirements before 2029, ensuring a fair process for those affected.
The merger is expected to yield annual synergies of about 350 million Swiss francs before taxes, significantly enhancing the financial capabilities of the combined entity. Additionally, the new company is projected to increase its dividend capacity by around 20 percent by 2029.
As part of the merger agreement, shareholders of Baloise will receive 1.0119 Helvetia shares for every Baloise share they hold. The transaction is subject to approval from shareholders and regulatory bodies, with completion anticipated in the fourth quarter of 2025. An extraordinary general meeting is scheduled for May 23, 2025, to discuss the merger further.
Rupprecht expressed optimism about the merger, emphasizing the cultural similarities and strategic alignment between the two companies. He noted, "The strong cultural affinity and similar strategic directions of both companies are the best prerequisites for a smooth integration." Both firms aim to leverage this merger to enhance their competitive stance not only in Switzerland but across Europe, aspiring to rank among the top ten insurers on the continent.
Analysts have pointed out that the merger comes in the wake of increased scrutiny on Baloise's profitability, which has reportedly been 50 percent below the industry average. The involvement of Cevian, a major shareholder in Baloise, has added pressure for a strategic reorientation. Cevian had previously called for Baloise to reconsider its market position in Germany and address high operational costs within its banking sector.
The potential for significant cost savings through the merger has been underscored, with expectations that around two-thirds of the 350 million francs in annual savings will come from workforce reductions. However, Rupprecht refrained from providing specific figures regarding job losses, citing the early stage of the merger process.
As the merger progresses, the companies have committed to maintaining transparency and fairness throughout the transition. A spokesperson for Helvetia reiterated, "We are committed to making this process transparent and with the utmost fairness, respect, and support for the affected individuals."
In summary, the merger between Baloise and Helvetia represents a pivotal moment in the Swiss insurance landscape, promising enhanced market strength and operational efficiencies while also posing challenges related to employment and integration. As stakeholders await further developments, the upcoming extraordinary general meeting will be crucial in shaping the future of the newly formed Helvetia Baloise Holding AG.
