KBC, the Belgian banking and insurance group, is selling its Polish insurance unit Warta to German insurer Talanx for 770 million euros (£644 million) as part of a series of sales required by EU regulators.
KBC, who received a 7 billion euro bail-out at the height of the financial crisis, said today that the deal is set to boost the group’s profits by 30 million euros. It will be one of the last deals the group is required to make under a plan with the European Union in return for the aid received during the crisis.
Talanx is Germany’s third largest insurer. The company is planning an IPO and is the majority shareholder in Hannover Re with a 50.2 per cent stake. When the acquisition is completed the company will take control of Warta’s 1.5 million customers and 2,765 staff.
The deal will make Talanx the second biggest insurance group in Poland behind PZU.
“Warta is big but was undermanaged by KBC,” Reuers sited an investment banker familiar with the companies as saying.
“If Talanx comes with a new vision and tighter management, the price can be justified,” he said.
The deal will give Talanx more independence from its German business and could be a helpful boost leading up to their market listing.
The deal is expected to be among the last in a number of sales KBC is required to make to pay back the Belgian Federal state for the aid the group received. The group has already sold its private banking arm, it’s British brokerage Peel Hunt, and much of its Asian operations.
Before their debt is paid, they will need to sell their Polish banking subsidiary Kredyt Bank, their relativly small German business, it’s diamond bank unit in Antrwerp and its operations in Serbia and Russia, Reuters said.
Despite the shedding all this weight, shares for the group are strong, sitting at 12.14 euros this morning.
