Greece's Piraeus Bank has signed an agreement to divest 100% of ATE Insurance to ERGO Insurance Group, a subsidiary of Munich Re.
Under the terms of the transaction, Piraeus will receive a total consideration of €90.1m in cash, subject to customary net asset value adjustments upon closing.
Pending receipt of the concerned regulatory approvals, the transaction is expected to conclude by the end of 2014.
The divesture of ATE Insurance business is part of Piraeus Bank’s restructuring plan, under which the lender aims to offlaod non-core assets to boost its balance sheet. Piraeus Bank is majority owned by Greece’s bank bailout Hellenic Financial Stability Fund (HFSF).
Commenting on the deal, Piraeus Bank CEO Anthimos Thomopoulos said: "Today Piraeus Bank has made a significant step forward in executing its strategy to gradually exit non-banking operations, redirecting its resources and management focus to core banking activities.
"The strong reputation and presence of ERGO in Greece and abroad coupled with the existing long-standing bancassurance relationship between the two institutions ensure the best prospects for ATE Insurance, its employees and its customers."
In July 2012, Piraeus Bank acquired ATE Insurance as a part of its acquisition of the "good" part of ATEbank. ATE Insurance operates as one of the fifth largest property-casualty insurers in the Greek market and also provides life insurance products to its customers.
The company recorded a premium income of €170m, of which €130m in property-casualty in 2013.
Image: Piraeus Bank agrees to divest ATE Insurance to ERGO Insurance. Photo: courtesy of PinkBlue / FreDdigitalPhotos.net.