European financial services groups Almanij and KBC Group have confirmed plans for the merger of the two companies through the acquisition of Almanij by the KBC Bank and Insurance Holding Company. The merger proposal will be put to shareholders in March 2005.

Almanij shareholders will receive new shares proportionate to their existing shareholding in Almanij. There will be no cash consideration.

Prior to the merger, Almanij will make an unconditional public cash tender offer for the ordinary shares (at E150 per share) and preference shares (at E135 per share) of Kredietbank SA Luxembourgeoise (KBL) that are not already owned by the Group.

The Almanij cash bid for KBL shares is a step in streamlining the group structure. By way of the KBL tender offer, Almanij aims to give KBL shareholders the opportunity to sell their shares before the merger takes place. After the merger, KBC Group NV, via KBL, will apply for a delisting of KBL shares from the Luxembourg Stock Exchange.

If successful, the new structure will result in one integrated company, listed on Euronext, which will be called KBC Group NV. Its main entities will be KBC Bank, KBC Insurance, KBL European Private Bankers, KBC Asset Management and Gevaert.

The new structure will enhance the group’s profile by tying both private banking and private equity expertise more closely into an already successful bancassurance model.

KBC Group NV will continue to maintain its core geographic focus on Belgium, Central Europe and the private banking network throughout Europe, with Central Europe and the European private banking network expected to remain long-term earnings drivers on the back of both macro growth in the region and further efficiency improvements.

Provided the shareholders approve the merger, and subject to permission being obtained from the relevant governing bodies and regulatory authorities, the new KBC Group NV will come into being on March 2, 2005.