Piraeus agrees to enter into exclusive discussions with CVC regarding the acquisition of Ethniki Insurance
Rhea-AI Summary
Piraeus Financial Holdings has entered exclusive discussions with CVC Capital Partners' Fund VII to acquire a 70% stake in Ethniki Insurance for €469mn. The acquisition is expected to diversify and strengthen Piraeus' revenue pool while delivering significant value to shareholders.
The proforma impact on Piraeus' capital position is estimated at approximately 150bps as of September 2024, maintaining a comfortable Pillar 2 Guidance buffer exceeding 200bps. Piraeus plans to pursue the Danish Compromise, which could reduce the capital effect to below 100bps.
Ethniki Insurance is Greece's leading composite insurer with a 14% market share, €0.8bn in Gross Written Premiums, €4bn total assets, and €0.4bn shareholders' equity as of 2023. The company reported adjusted profit before tax of approximately €100mn in 2023. Its network includes 130 Sales Network Offices with over 1.6k Corporate Network Insurance Agents and extensive collaboration with insurance agencies and brokers.
AI-generated analysis. Not financial advice.
Positive
- Acquisition of 70% stake in Greece's #1 insurer for €469mn
- Target company reports €100mn adjusted profit before tax (2023)
- Expected revenue diversification and value uplift for shareholders
- Strong market position with 14% market share in Greece
- Extensive distribution network with 130+ sales offices
Negative
- Significant capital impact of 150bps on Piraeus' position
- Regulatory approval pending for Danish Compromise implementation
- Transaction subject to regulatory approvals and completion risks
News Market Reaction – BPIRF
On the day this news was published, BPIRF gained 10.47%, reflecting a significant positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
(Athens Stock Exchange: TPEIR) (OTCQX: BPIRY) (OTCQX: BPIRF)
Post the completion of the Potential Transaction, Piraeus expects to diversify and further strengthen its revenue pool and to deliver significant value uplift to its shareholders.
Based on the above, the proforma impact on Piraeus' capital position is estimated at approximately 150bps as at September 2024. This impact translates into a capital ratio with a comfortable Pillar 2 Guidance buffer of more than 200bps. Piraeus intends to pursue the potential adoption of the Danish Compromise in relation to the prudential treatment of its possible participation in the share capital of Ethniki Insurance, which, if attained, would reduce the capital effect of the Potential Transaction to below 100bps.
Ethniki Insurance is the #1 composite insurer in
Ethniki Insurance's production network extends throughout
Piraeus is being advised on the Potential Transaction by UBS Europe SE as exclusive financial advisor, Milliman as actuarial advisor, and by Milbank LLP, as well as Moratis Passas Law Firm, as international and local legal counsels, respectively.
Piraeus will promptly inform the investment community in accordance with the applicable provisions should an additional reportable event arise.
Disclaimer
Forward looking statements
This release contains forward-looking statements, including, without limitation, statements regarding the potential benefits of the contemplated transaction, expected synergies and the anticipated capital impact. These forward-looking statements are based on the current expectations of Piraeus and are subject to various risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Factors that could cause or contribute to such differences include, but are not limited to, the granting of regulatory approvals, to unforeseen operational challenges or changes in market conditions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release, without any obligation by Piraeus to update regarding any future developments. This announcement does not constitute an offer to buy or the solicitation of an offer to sell any securities.
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SOURCE Piraeus Financial Holdings