Insurance companies Garanta and Alpha Insurance, controlled by the Greek company Ethniki Asfalistiki, will merge next year, says the general manager of Garanta, Konstantinos Argyropoulos.
"The merger process will begin in January, after we receive approvals from the Competition Council and the Insurance Surveillance Commission, and is not likely to last for more than six months," stated Argyropoulos.
Greek insurance company Ethniki, which owns 93.26% in the stock of Garanta, bought Alpha Insurance from the Alpha Bank Group in October, under a 2.7 million-euro transaction. Ethniki is part of the National Bank of Greece (NBG) group, which took over Banca Romaneasca at the end of 2003. Through Banca Romaneasca, the Greeks also own 20% in the stock of insurance company Asitrans.
"Ethniki does not rule out the possibility of making other acquisitions on the insurance market, but not in the near future," explained the general manager of Garanta, Konstantinos Argyropoulos. At the beginning of next year, Alpha Insurance will change its name to NBG Asigurari, because the former shareholder of the company does not want it to continue its activities under this name, says Argyropoulos. He estimates the new entity will derive profit from the merger synergy at the end of 2006. Shareholders have not yet decided which of the companies will be the absorbing one in this process.
"The merger will cost us 50,000-60,000 euros. There will be expenditures linked to advisors and to the evaluation of the ratio between Alpha and Garanta stock. Then, there are synergies: we will use the same IT system and will make the best use of space," stated Argyropoulos.
Alpha Insurance is entirely controlled by Ethniki. Beside the Greeks, Garanta shares are also owned by the chairman of LaDorna company, Jean Valvis (5%), Radiocomunicatii (0.73%), RomTelecom (0.59%) and Posta Romana (The Romanian Post Office) with 0.42%.
In the first nine months of this year, Garanta logged subscriptions worth almost 7.2 million euros (26 million RON), about 2% lower in euros from the same period last year.
In the first three quarters of this year the insurer derived operational income standing at more than 124,000 euros (450,000 RON). Alpha has not yet reported its nine-month financial results. Last year, the company logged deals worth 2.65 million euros and profit worth more than 38,000 euros.
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