§ 5 (1) of the Statutes provides for authorized capital (Authorized Capital 2022/I). Authorized Capital 2022/I was created by the General Meeting on May 4, 2022, in the amount of EUR 467,968,000 and currently remains in full force. It has a term until May 3, 2027. The Management Board and Supervisory Board propose to the Annual General Meeting that a new Authorized Capital 2026 be created in the same amount.
Upon the Authorized Capital 2026 taking effect, the existing Authorized Capital 2022/I is to be canceled. At the same time, Authorized Capital 2022/II (§ 5 (2) of the Statutes) in the amount of EUR 15,000,000 for the purpose of issuing shares to persons employed by Allianz SE or one of its Group companies is to be canceled without replacement, as the Company does not intend to make use of this authorization in the future. Under Agenda Item 10, it is also proposed to create a new conditional capital (Conditional Capital 2026) and to cancel the unused Conditional Capital 2022 when the new Conditional Capital 2026 takes effect. Upon the proposed authorizations under Agenda Items 9 and 10 taking effect, Allianz SE will thus have Authorized Capital 2026 and Conditional Capital 2026 at its disposal. Beyond this, the Company will have no authorizations to increase its share capital.
The proposed framework of EUR 467,968,000 for the Authorized Capital 2026 corresponds to 40% of the share capital at the time of this authorization. The term of the proposed authorization is five years.
Authorized Capital 2026 is proposed because Allianz SE must be able to act quickly and flexibly in the interests of its shareholders at all times. The Management Board therefore considers it its duty to ensure that the Company always has the necessary instruments for raising capital at its disposal, regardless of specific plans for utilization. Since decisions on covering capital needs usually have to be made at short notice, it is important that the Company is not dependent on the rhythm of annual general meetings. The legislator has addressed this requirement through the instrument of authorized capital. Reasons for utilizing authorized capital may include, in particular, strengthening the equity base, for example in the event of an unforeseen crisis situation, and financing the acquisition of investments.
At the same time, the sum of (i) the shares issued using the Authorized Capital 2026 and (ii) the shares issued to service conversion or warrant rights or conversion obligations from certain bonds or profit participation rights issued during the term of this authorization, is limited to a proportionate amount of the share capital totaling EUR 467,968,000 – which corresponds to 40% of the share capital of EUR 1,169,920,000 at the time of this authorization.
When the Authorized Capital 2026 is utilized through a cash capital increase, shareholders generally have subscription rights.
However, the Management Board shall be authorized, in particular in the cases specified in the proposed authorization, to exclude shareholders’ subscription rights with the approval of the Supervisory Board.
Among other things, the authorization provides that the Management Board may, with the approval of the Supervisory Board, exclude fractional amounts from shareholders’ subscription rights. This enables the authorization to be utilized in round amounts and facilitates the technical handling of an issue. The new shares excluded from subscription rights will be utilized in the best possible way for the Company.
In addition, it should be possible to exclude shareholders’ subscription rights with the approval of the Supervisory Board to the extent necessary to grant holders of bonds or profit participation rights with conversion or warrant rights or conversion obligations a subscription right to new shares, if this is provided for in the terms and conditions of the respective bond or profit participation right. Such bonds or profit participation rights generally have dilution protection, as the value of the conversion or warrant right or the conversion obligation of the holders of bonds or profit participation rights would be reduced if these holders were not granted subscription rights to new shares to the extent to which they would be entitled after exercising their conversion or warrant rights or after fulfilling a conversion obligation. To enable the Company to grant the holders such subscription rights, it is necessary to exclude the subscription rights of shareholders. The option of granting shares to holders of convertible bonds, bonds with warrants, or convertible profit participation rights instead of reducing the conversion or exercise price of the warrant may be economically advantageous for the Company.
Furthermore, it should be possible to exclude shareholders’ subscription rights with the approval of the Supervisory Board if the new shares are issued at a price that is not significantly lower than the stock market price in the case of cash capital increases pursuant to § 186 (3) sentence 4 AktG. This authorization enables the Company to take advantage of market opportunities in its various business areas quickly and flexibly and to cover any resulting capital needs at very short notice if necessary. The exclusion of shareholders’ subscription rights not only enables more timely action, but also allows the shares to be placed at a price close to the stock market price, i.e., at a lower discount than is usually required for issues with subscription rights. This leads to higher issue proceeds for the benefit of the Company. In addition, such a placement can be used to attract new groups of shareholders. If the authorization is exercised, the Management Board will set the discount as low as possible in accordance with the market conditions prevailing at the time of the placement. The shares issued with the exclusion of subscription rights pursuant to § 186 (3) sentence 4 AktG may not exceed a total of 10% of the share capital, either at the time this authorization takes effect or – if this value is lower – at the time this authorization is exercised.
This 10% limit shall include shares of the Company (i) that are sold during the term of this authorization with the exclusion of shareholders’ subscription rights in corresponding application of § 186 (3) sentence 4 AktG, and (ii) that are issued to service conversion or warrant rights or conversion obligations arising from bonds or profit participation rights, provided that the bonds or profit participation rights are issued during the term of this authorization with the exclusion of shareholders’ subscription rights in corresponding application of § 186 (3) sentence 4 AktG.
These provisions restricting the exclusion of subscription rights take into account the shareholders’ need for protection against dilution of their shareholdings. Due to the issue price of the new shares being close to the stock market price, as well as the size limitation of the capital increase without subscription rights, each shareholder has the opportunity to acquire the necessary shares to maintain their shareholding ratio on the stock exchange at approximately the same conditions. This ensures that the financial interests and voting rights of shareholders are adequately protected if the Authorized Capital 2026 is utilized with the exclusion of subscription rights, while at the same time granting the Company flexibility for the benefit of all shareholders.
It should also be possible to exclude shareholders’ subscription rights in the case of capital increases against contributions in kind with the approval of the Supervisory Board. This enables the Management Board to have shares in the Company available for use in appropriate individual cases in connection with the acquisition of companies, company interests, or other economic assets. The ability to offer shares in the Company as consideration creates an advantage in the competition for interesting acquisition targets and provides the necessary leeway to take advantage of opportunities to acquire companies, company interests, or other assets in a liquidity-preserving manner. The transfer of shares can also be useful from the perspective of an optimal financing structure. This does not put the Company at a disadvantage, as the issue of shares against contributions in kind requires that the value of the contribution in kind be proportionate to the value of the shares.
In the context of the exclusion of subscription rights in the event of capital increases against contributions in kind, the Management Board shall also be authorized to utilize the Authorized Capital 2026 to grant holders of securitized or non-securitized monetary claims against the Company or its direct or indirect subsidiaries shares in the Company in whole or in part instead of cash payments. This gives the Company additional flexibility to grant shares instead of cash in cases where, for example, it initially commits to a cash payment for an acquisition.
The total number of shares issued under this authorization against cash and in-kind contributions with the exclusion of shareholders’ subscription rights may not exceed 10% of the share capital, either at the time this authorization takes effect or – if this value is lower – at the time this authorization is exercised. This limit shall include shares of the Company (i) that are sold during the term of this authorization with the exclusion of shareholders’ subscription rights in corresponding application of § 186 (3) sentence 4 AktG, and (ii) that are issued to service conversion or warrant rights or conversion obligations arising from bonds or profit participation rights, provided that the bonds or profit participation rights are issued during the term of the Authorized Capital 2026 with the exclusion of shareholders’ subscription rights. This restriction limits the potential dilution of shareholders excluded from subscription rights.
The Management Board will carefully consider in each individual case whether to make use of this authorization to increase capital with the exclusion of shareholders’ subscription rights. It will only do so if, in its opinion, it is in the interests of the Company and thus its shareholders. Such reserve resolutions with the possibility of excluding shareholders’ subscription rights are common practice both nationally and internationally.
There are currently no concrete plans to make use of the new Authorized Capital 2026. The Management Board will report on the use of Authorized Capital 2026 at each subsequent General Meeting.