Piraeus Bank S.A. announced that it has entered into a Share Purchase Agreement to acquire 90.01% stake in the parent company of Ethniki Insurance from CVC Capital Partners Fund VII.
As per the signed SPA, the consideration for the transaction amounts to 600 million euros in cash, on a 100% basis.
“The transaction is expected to further diversify the revenue sources of Piraeus, enhancing value creation for shareholders, while it will complement our product range, covering the whole spectrum of banking, protection and investment solutions,” the bank said in a statement.
The transaction is accretive for Piraeus in Earnings per Share (EPS) by circa 5% and Return over average Tangible Book Value (RoaTBV) by circa 1 percentage point and it elevates fee generation to international best-in-class levels, while retaining its competitive cost efficiency aspiration.
Piraeus intends to achieve a Financial Conglomerate (FICO) status and pursue the application of CRR article 49 (commonly referred to as Danish Compromise) in relation to the prudential treatment of its participation in the share capital of Ethniki Insurance, which, if attained, would expand further our CET1 ratio by circa 50bps.
Ethniki Insurance is a leading composite insurer in Greece, covering the whole spectrum of insurance products with a circa 14.5% market share (circa 17% in life / circa 11% in non-life) and more than 0.8 billion euro Gross Written Premiums (GWP), as of 2024.
Ethniki Insurance has 4 billion euros total assets and 0.4 billion euros shareholders’ equity, as of 2023. Ethniki Insurance reported a profit before tax adjusted for non-recurring items of approximately 100 million in 2023 (latest public data).
Ethniki Insurance’s production network extends throughout Greece and consists of owned sales network offices and corporate network insurance agents, as well as collaborating insurance agencies and insurance brokers.
The GWP generated by the aforementioned channels comprise the vast majority of the Ethniki Insurance total production, with the remaining coming from its bancassurance channel.
The transaction is subject to the approvals of the competent regulatory bodies.
Piraeus is being advised on the transaction by UBS Europe SE as exclusive financial advisor, Milliman as actuarial advisor, and by Milbank LLP, as well as Moratis Passas Law Firm and Potamitis Vekris Lawfirm, as international, local legal and competition counsels, respectively.
