French group AXA, with more than 91 billion euros in turnover,is about to enter the local insurance market and will do it byacquiring Omniasig Life, a small life insurance company, controlledby the Austrians at Vienna Insurance Group.
The value of the deal is lower than 10 million euros, according tocertain estimates.
The French have been trying to buy a local insurer for a number ofyears but every attempt has failed. In 2008 they participated inthe tender to take over Asiban and Unita, but the price offered waslower than the competitors'. Eventually, AXA announced at the endof last year that it would increase its capital by 2 billion eurosto finance acquisitions.
Vienna Insurance, the owner of Omniasig Life is the biggest groupon the local insurance market, as it also owns Omniasig, Asirom,BCR Viata and BCR Asigurari.
"The contract with AXA was signed in December 2009. The completionof the deal will take place in the first half of 2010, depending onhow soon the authorities approve it. The parties decided not to gopublic with the value of the deal," Alexander Jedlicka, ViennaInsurance spokesman told ZF.
The insurance market has been experiencing an acquisition rush overthe last few years and prices have risen spectacularly. Forinstance, another French group, Groupama, paid 350 million euros in2008 to buy Asiban, one of the biggest players on the insurancemarket, which is double the gross premiums underwritten (an indexthat gauges the business volume in the insurance sector). With thecrisis still raging, insurers are most likely trading at multiplesof 0.8-1 of the gross premiums underwritten.
Omniasig Life posted about 14 million euros in turnover in 2008,which put it at the bottom of the ranking of the top ten players inthe life insurance business. Last year, however, companies on thismarket were severely hit by the crisis, and Omniasig Life droppedout of top ten. Under the circumstances, the price AXA will paywill be below 10 million euros, according to certain estimates.Omniasig Life had a 2.7% share of the life insurance market in2008, according to the latest official data available.
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