French insurance giant AXA and UkrSibbank, the Ukrainian banking arm of BNP Paribas have agreed to acquire 99% of the share capital of Ukraine's sixth largest property and casualty insurer, Vesko.

The partnership between AXA and UkrSibbank was first established in June 2007, when the two firms agreed to team up in the Ukrainian property and casualty insurance market, which resulted in the creation of a joint venture company called Ukrainian Insurance Alliance (UIA).

The consolidation of Vesko and UIA’s market shares will position AXA and BNP Paribas in third place, with a 7% market share, in the rapidly growing Ukrainian market. Under the terms of the deal, both companies will be held jointly by AXA and UkrSibbank and both will be under the management control of AXA.

The transaction is expected to close before the end of 2007, after receiving the customary regulatory approvals.