Allianz to buy Yapi Kredi Sigorta for nearly 950 mln euros : Sources

ISTANBUL/LONDON – Reuters

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Germany’s Allianz has agreed to buy Turkish insurer Yapı Kredi Sigorta’s core insurance arm and a majority stake in its pension unit for nearly 950 million euros ($1.2 billion), sources familiar with the matter said on March 25.

However, Yapı Kredi Bank made public earlier today that the negotiations and work on the stake sale of Yapı Kredi Sigorta, the insurance arm of Yapı Kredi Bank, had not been finalized, adding that the company had not signed an agreement yet.

Japanese company Dai-ichi Life Insurance and Zurich Insurance had also been in the race for Yapı Kredi Sigorta - a joint venture between Turkish group Koç Holding and Italian bank UniCredit.

“Dai-ichi was bidding for the life [insurance] part only but Yapı Kredi decided separating life and non-life [insurance] would cost too much, operationally and tax-wise, so they preferred selling in one block to Allianz,” one of the sources said.

With a population of nearly 75 million with an average age under 30, Turkey offers lucrative growth opportunities for global insurers.

Government initiatives to encourage savings through private placement plans, which became effective from the beginning of 2013, have made the business more attractive.

Large deals have been few and far between in the sector, which means the sale of Yapı Kredi’s insurance business will be the largest ever in the Turkish industry.