Wednesday June 25, 11:45 AM
Generali PPF buys Romania's ARDAF, RAI from PPF Investments UPDATE
(updates with CEO saying Generali plans to pursue acquisitions in high potential markets)
MILAN (Thomson Financial) - Assicurazioni Generali SpA (Milan: G.MI - news)
said that its unit Generali PPF has signed an agreement to buy the Romanian insurance companies ARDAF and RAI from the private equity group PPF Investments.
The unit of the Italian insurer will buy a 72.7 percent stake in ARDAF and 99.9 percent of RAI for an undisclosed sum.
Generali PPF is a joint venture between Generali and the PPF group. It controls the activities in central and eastern Europe of the two companies.
Generali has a 51 percent stake in the venture and PPF the remainder.
Generali's chief executive Sergio Balbinot said that Romania is a strategic market for the group.
'In the coming years, the excellent economic fundamentals of the country will allow a two-digit growth of the insurance market,' he said.
The deal enables Generali to double its market share in Romania to 11.7 percent, he added.
In February, the Czech daily Hospodarske Noviny said that Generali PPF would have bought ARDAF and RAI for 80 million euros.
ARDAF had gross premiums of 48.4 million euros in 2007 and RAI gross premiums of 7.8 million euros.
Balbinot added that Generali plans to continue expanding in high-potential markets thanks to targeted acquisitions.
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