Lithuania’s Competition Council has received a report from the German multinational Ergo International insurance group on its plan to acquire a majority stake in the Lithuanian insurance company ADB Gjensidige (Gjensidige Baltics), LETA was told by the competition watchdog.
The council now has one month to decide on whether to approve or ban the transaction, also thinking about binding terms if it is okayed. If the case requires further investigation, the time limit for taking a decision may be extended to four months after the report is received.
Market participants and others who are interested in the matter may submit their views on the proposed merger and its potential impact on competition. Such people are asked to contact the Competition Council by January 17.
As has been reported in the past, the Norwegian Gjensidige Forsikring insurance company is selling its Baltic subsidiary, ADB Gjensidige (Gjensidige Baltics), to the German based multinational Ergo International for EUR 80 million.
According to Gjensidige’s Website, the plan is for Ergo to take over 100% of shares under an agreement that has been reached by the two sides.
Regulatory approval will be needed before the transaction can take place.
Gjensidige CEO Geir Holmgren says that the sale of the insurance company’s Baltic business shows that it has a clear focus on the Nordic market, adding that this is in line with the company’s core competence and capabilities. Holmgren added that the creation of a leading Nordic P&C company is his key priority.
It is not expected that the transaction will have much impact on Gjensidige Group financial, and its financial targets have not changed. It is expected that the transaction will result in an accounting loss of around NOK 120 million (EUR 10 million), and that is to be attributed to the third quarter of 2024.
Once the acquisition is complete, ADB Gjensidige will be integrated into Ergo’s Baltic operations, and the operations of the two insurers will merge. Customers, partners and brokers will not be affected by the merger, and all existing contacts will remain in effect, and insurance cover will be provided. The Gjensidige brand name will remain until after the transaction is completed, and then there will be a general transition toward the Ergo brand name.
Source: BNS
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