What if Groupama had started a business from scratch instead of making acquisitions?

The investment made by Groupama on the insurance market is the largest on the Romanian financial market, second only to the amount paid by Austria-based Erste for the largest bank on the Romanian market, BCR.
Having made this year's biggest launch on the Romanian insurance market - Groupama Asigurari, the French group also announced the sum invested: 600 million euros, which earned it the third position on the market.
What would it have obtained if it had started a business from scratch with this money?
"There is always a debate to be had when it comes to an acquisition versus a greenfield investment (building a business from scratch). If you want to get a lot in a very short span of time, you go for an acquisition. Groupama gained precious time this way, because otherwise one would have to hire several hundred people, a top management team, build a sales team; it's not an easy thing to do," says Marian Tescaru, managing partner of investment banking advisory company Altria Capital.
Groupama, with over 16 billion euros in turnover last year internationally, is one of the most aggressive investors on the Romanian insurance market, having made three acquisitions: BT Asigurari, Asiban and OTP Garancia. The three companies were purchased in less a year, from late 2007 to mid 2008, for 450 million euros. The French paid 100 million euros for BT Asigurari and 350 million euros for Asiban, with the latter being a record-high transaction on the Romanian market, considering that Asiban was valued at double the volume of its gross premiums underwritten (the main indicator of the insurance market, which points to the volume of business).
In the wake of the acquisitions, the French spent another 128 million euros to cover losses of the three insurers. Recently Asiban has merged with BT Asigurari, creating a new company: Groupama Asigurari, which, by the end of the year, will absorb OTP Garancia.
"With 600 million euros, you can build a business from scratch, but it takes a long time until you build a client portfolio and a sales network. I think these acquisitions primarily gained Groupama time," says Cristian Fugaciu, general manager of insurance broker Marsh.