Italy's top insurer, Generali, agreed on Thursday to take a majority stake in a joint venture with a Czech group that will make it the leading sector player in central and eastern Europe.
Under the deal, Generali will pay €1.1 billion ($1.50 billion) for a 51% stake in a joint venture with private group PPF that will control leading Czech insurer Ceska Pojistovna as well as Generali's assets in the region. The deal values Ceska Pojistovna at €3.6 billion and Generali's assets at €1.5 billion, the companies said in a joint statement. The new group will have 9 million customers. The newly-formed group will be the leader in the region with pro-forma premiums worth €2.6 billion at the end of 2006, just above Germany's Allianz and Austria's Wiener Staedtische. PPF will own 49% of the joint venture. „Generali's historical ties to the CEE region are well known,” said Generali co-CEO Sergio Balbinot. „To further this success, we have been looking for the right partner with whom we can take the business to its next stage of development.” The deal is expected to be completed in the second half of 2007, the statement said.
Generali says the transaction will add 2.2% to net profit by 2008 and be neutral to its financial ratings. Pojistovna, which at the end of 2006 controlled a third of the Czech insurance market, is fully owned by investment group PPF, held by financier Petr Kellner, the country's richest man. Generali, Italy's leading insurer with a market worth of about €42.5 billion ($57.86 billion) and Europe's third-largest, serves 4 million customers in 10 central and eastern European countries . Ceska Pojistovna, a former communist-era insurance monopoly, has seen its market share erode over the past year as competition grows. (reuters.co.uk)