Poland’s PZU to Pay $498 Million for RSA’s eastern european units

PZU SA, crucial Europe’s largest insurer by way of market value, agreed to shop for RSA insurance group %’s four gadgets in the biggest foreign acquisition with the aid of a Polish financial organisation.

PZU can pay a blended €360 million ($498 million) for Lietuvos Draudimas AB in Lithuania, AAS Balta in Latvia, the Estonian department of Codan Forsikring A/S and Warsaw-based totally Link4 Towarzystwo Ubezpieczen SA, RSA said in a regulatory announcement today. RSA expects the transaction to be finished in the second half of of the 12 months.

state-controlled PZU, which controls approximately 30 percentage of Poland’s existence and property insurance marketplace, is looking beyond its 38 million-resident home market for growth. It failed to buy Croatia Osiguranje d.d as well as Polish creditors financial institution Gospodarki Zywnosciowej SA and Alior bank SA final yr.

“PZU is shopping for gamers with solid positions, well-known emblem names and working on markets with long-time period boom capacity,” Pawel Kozub, a Warsaw-primarily based analyst at UniCredit SpA, stated through cellphone. “these also are difficult markets.”

PZU stocks rose for the primary time in 5 days, hiking three percentage to 427.2 zloty [$141] at 10:48 a.m. in Warsaw, valuing the insurer at 36.9 billion zloty ($12.2 billion). RSA climbed 2.7 percentage to 95.05 pence [app. $1.54] in London buying and selling, heading for the best near due to the fact that Nov. 12.

Asset income

RSA’s new chief government Officer Stephen Hester is promoting belongings to assist bolster the stability sheet after three earnings warnings inside the fourth region and an accounting scandal at its Irish unit. Hester stated nowadays the insurer will continue to assess other asset disposals, some of which are anticipated to arise this yr.

PZU, which in 2012 announced plans to spend as tons as 7 billion zloty [$2.31 billion] on overseas acquisitions, in advance considered takeovers of country-owned insurers in former Yugoslav republics, which includes Croatia, Serbia and Montenegro. In Poland, the employer is in search of to shop for fitness insurers belonging to nation energy agencies, KGHM Polska Miedz SA and PKN Orlen SA.

“these days’s takeover is part of our expansion method and ought to help us solidify our main role in the vicinity,” PZU CEO Andrzej Klesyk said at a news convention in Warsaw, including the acquisition won’t affect 2013 dividend.

Klesyk estimates the Baltic coverage markets to grow as plenty as 10 percent annually.

earlier than the transaction, PZU was Lithuania’s third-biggest non-lifestyles insurer with a 13.6 percent marketplace percentage in 2013, according to the bank of Lithuania’s website. it's far the Baltic state’s 7th-biggest existence insurer, with 4.2 percentage of the 626 million-litai ($251 million) marketplace, relevant bank data shows.