4.3 Major acquisitions and new formations

In August 2013 Hannover Rück SE reached agreement with another investor on a financial participation in a company, the business object of which is the indirect acquisition of Heidelberger Lebensversicherung AG, Heidelberg. Regulatory approval for the acquisition of Heidelberger Leben from a seller belonging to Lloyds Banking Group, London, has been received by Hannover Rück SE as the indirect acquirer, but has not yet been given to the other investor.

In the year under review the structure of Hannover Re Euro RE Holdings GmbH, Hannover, and of Hannover Re Real Estate Holdings, Inc., Orlando, USA, was appropriately expanded in order to hold individual properties (“special purpose companies”) or satisfy requirements of company law (“holding companies”). In this connection an amount of altogether EUR 123.5 million was invested for the acquisition of corresponding companies. No contingent liabilities, conditional payments or separate transactions as defined by IFRS 3 were identified.

This included in the third quarter of 2013 the acquisition of all shares in the company HR GLL Europe Holding S. à. r. l. (company name after renaming in the context of acquisition) by HR GLL Central Europe GmbH & KG. The company was included in the consolidated financial statement for the first time with effect from 30 September 2013.

HR GLL Central Europe Holding GmbH was established in the first quarter of 2013 and included in the consolidated financial statement for the first time with effect from 30 September 2013. All shares in the company are held by HR GLL Central Europe GmbH & KG. Both holding companies commenced their investment activities in special purpose property companies. Consequently, the special purpose companies HR GLL Roosevelt Kft, HR GLL CDG Plaza S.r.l., HR GLL Liberty Corner Sp. z.o.o. and HR GLL Griffin House Sp. z.o.o. were established in the year under review. Lastly, the special purpose company Akvamarine Beta s.r.o. was acquired.

Within the US subgroup Hannover Re Real Estate Holdings, Inc., which is 95.1% owned, all shares in the special purpose companies Broadway 101 LLC and River Terrace Parking LLC were acquired through the subsidiary GLL HRE Core Properties, LP.

With effect from 1 January 2013 Glencar underwriting Managers, Inc., based in Chicago, United States (Glencar), was consolidated for the first time in view of the expansion recorded in the business volume. The business object of the company is to write specialty lines as well as property and casualty program business in the US market with a focus on small to mid-sized programs. In the second quarter of 2011 Funis GmbH & Co. KG, a wholly owned subsidiary of Hannover Rück SE, participated in Glencar with a capital contribution of USD 98,000 (corresponding to 49.0% of the share capital). Preference shares in an amount of roughly USD 2.3 million were purchased in the course of the third quarter of 2011; of these, preference shares amounting to USD 1.6 million constitute voting, puttable equity instruments and were therefore recognised as debt pursuant to IAS 32. The remaining preference shares in an amount of roughly USD 0.7 million have the features of non-voting, non-puttable equity instruments and are classified as equity pursuant to IAS 32. Given that Hannover Re holds a majority of the voting rights in Glencar, it has the possibility of exercising control over the company. For reasons of materiality Glencar was carried as a participating interest until the fourth quarter of 2012. At the time of initial consolidation and as at the balance sheet date, Funis held an interest of 49.0% in the share capital. The liabilities-side difference arising out of initial consolidation in an amount of EUR 0.2 million was recognised in income.