• With this transaction, both companies shall be able to dispose of their cross-shareholdings, as announced to the market last October.
• At the end of this process, each of Grupo SURA’s shareholders shall maintain their current shares and for each of these, shall receive 0.72 shares in Grupo Argos, thereby preserving their initial economic value, now represented in direct stakes held in both companies.
• With this, Grupo SURA can now move forward with specializing more on its own particular sector based on a sound portfolio made up three main investments namely Suramericana, SURA Asset Management and Bancolombia.
• This operation is not only efficient but also guarantees equal treatment for all shareholders from start to finish. It also facilitates the disclosure of value and enables a simpler shareholding structure, in line with current global market trends. 

Grupo SURA announced to the market on Wednesday that it had signed a spin-off agreement with Grupo Argos, in order to move forward with an operation that shall result in two independent companies, with no cross shareholdings whatsoever, holding specialized investments in their respective sectors, this pursuant to a Memorandum of Understanding, as announced to the market on October 25.

This announcement marks the beginning of a new stage for Grupo SURA, after 46 years of reciprocal shareholdings with Grupo Argos, a structure that favored the growth and expansion of our portfolio Companies in both Colombia and Latin America. During this time we also consolidated a way of doing business with a long-term vision, based on our corporate principles and focused on generating value for all our stakeholders, this having been forged over a corporate history spanning 80 years.

"After a period of consolidation and growth, driven by a structure that brought multiple benefits to our Company and to society in general, we are taking a fundamental step forward thereby projecting us into the future. We are grateful for the lessons we have learned so far and recognize this moment as an opportunity to leverage these same lessons as we go forward. This transaction marks a milestone in our evolution as a company," stated Ricardo Jaramillo Mejía, Grupo SURA’s Chief Executive Officer.

The benefits of this transaction

This transaction consists of reciprocal absorption spin-offs that will allow each of Grupo SURA’s shareholders to maintain their current investment and also receive shares in Grupo Argos, thereby preserving the present economic value of said shares while gaining a direct stake in both companies. This will facilitate the disclosure of value and enable a more straightforward shareholding structure, in keeping with current global market trends.

All shareholders shall maintain the same rights  held prior to this Transaction while receiving the same type of share they currently hold.

Another benefit of this transaction is that it shall be carried out substantially in a simultaneous manner, which ensures simplicity and transparency for all parties.

The proposed transaction, as structured  with Grupo Argos guarantees the best interests of all shareholders and ensures equal treatment for all of these, while positioning Grupo SURA and Grupo Argos as companies with greater liquidity potential. All of this creates a virtuous circle that benefits the shareholders, the companies and the market at large.

"After this operation, we shall become a more specialized Company, with a powerful portfolio composed of three leading investments in Latin America: SURA Asset Management, the main pension fund management firm in the region in terms of its volume of  assets under management; Suramericana, the fourth largest Latin American insurance company in terms of written premiums; and Bancolombia, the largest bank in the country with significant operations in Central America. We are convinced that, based on this portfolio, which today exceeds COP 1,100 trillion in assets under management, we have the knowledge, experience and the focus  in order to continue strengthening our strategy", concluded Grupo Sura´s Chief Executive Officer

A summary of the transaction

The following is a general explanation of the main steps involved in this transaction namely the spin-off, the absorption and the issuing of new shares. An explanatory video of this transaction is also available by clicking on the following link.

Spin-off Grupo SURA shall spin off the 286 million shares it holds in Grupo Argos, to all of the shareholders of the latter Company. In turn, Grupo Argos shall spin off the 197 million shares* it holds in Grupo SURA, to our shareholders.

Absorption Grupo SURA shall absorb the 197 million shares* spun off by Grupo Argos and, likewise, Grupo Argos will absorb the 286 million shares spun off by Grupo SURA.

New issue of shares Each company shall issue shares equivalent to the number of shares it has just absorbed. Grupo SURA will issue 197 million shares* to all Grupo Argos shareholders, including itself, therefore, the shares corresponding to its own shall be cancelled. This will lead to a lower number of outstanding Grupo SURA shares, and as a result, all of our current shareholders shall increase their economic stakes in the Company. Grupo Argos shall issue 286 million shares to all Grupo SURA shareholders, including Grupo SURA itself, and therefore the shares corresponding to Grupo SURA shall also be cancelled

At the end of this transaction , each of Grupo Sura´s shareholders shall maintain their current shares in the Company, and also, for each share held, they shall receive 0.72* shares in Grupo Argos thereby becoming direct shareholders of both companies. Likewise, each of Grupo Argos´ shareholders shall receive 0.23* shares in Grupo SURA for each share held in Grupo Argos. These ratios (0.72 and 0.23*) are independent of the value assigned to each share and reflect the relationship between the total number of outstanding shares of both companies and the number of shares held in the form of the previous cross-ownership structure.

Finally, this absorption spin-off is an efficient option in from the  financial and legal standpoints as well as the time it would take to carry this out, this while being subject to prior approval on the part of the General Assemblies of Shareholders of both  Grupo SURA and Grupo Argos providing their approval, as well as the respective Assemblies of Bondholders. Should such approvals be obtained, said transaction shall be submitted for the  approval of the Colombian Superintendency of Finance  as well as other  pertinent authorities. 
Detailed information on the progress of this transaction shall be provided to the shareholders and the market in a timely manner. 

*The number of shares to be spun off and the ratios referred to have taken into account the following factors: (i) that Cementos Argos shall dispose of its stake in Grupo SURA so that its shareholders shall directly hold a stake in said company, for which Grupo Argos shall receive approximately 15 million additional shares in Grupo SURA besides those it currently holds; and (ii) the shares owned by the Stand-Alone Voting Inhibitor Trusts shall also be a part of this transaction. These ratios may change as a result of variations in the number of outstanding shares held by Grupo SURA and Grupo Argos at the time these spin-offs are completed.