Allianz buys Turkish insurer Yapı Kredi for $879 million

FRANKFURT - Agence France-Presse

Customers use a cash machine at a branch of Yapi Kredi Bank in Istanbul February 14, 2013. REUTERS/Murad Sezer

German insurance giant Allianz has agreed to buy Turkish property and casualty insurer Yapı Kredi Sigorta in a bid to become the biggest insurance group in Turkey, the company announced earlier today.

Allianz said in a statement it will acquire a 93.9-percent stake in Yapı Kredi Sigorta for 684 million euros ($879 million).

The acquisition is part of a long-term cooperation agreement with Turkey’s fourth-biggest private bank Yapı Kredi, the German group explained. The deal will also cover the life and pension subsidiary Yapi Kredi Emeklikik.

Yapı Kredi Sigorta is the fifth largest property and casualty insurance company in Turkey with total premiums of 531 million euros and Yapı Kredi Emeklilik holds a top four position in life insurance with premiums of 90 million euros, the statement said.

“The combination of Allianz Turkey with the Yapı Kredi insurance operations will create the number one non-life insurer, the number two pensions provider and the number three life insurer in Turkey,” Allianz said.

“Turkey is one of the fastest growing insurance markets worldwide, supported by a robust economic outlook and a large, young population of 75 million people,” said Allianz board member Oliver Baete.

“The transaction with Yapı Kredi is a unique opportunity to move into a market-leading position in one of Europe’s key growth markets which is also an important bridge between Europe and Middle East and Central Asia,” Baete said.

Under the terms of the deal, Allianz will make a mandatory tender offer for the remaining 6.1 percent of Yapı Kredi Sigorta that is listed on the Istanbul Stock Exchange.

Yapı Kredi will retain a 20-percent stake in Yapı Kredi Emeklilik, Allianz added.