Retail therapy

26 March 2021 By Christopher Thompson Follow @CGAThompson

Europe’s top insurer will buy Aviva’s Polish unit for 2.5 bln euros. After more than a decade of eschewing large deals, CEO Oliver Baete is paying a rich 17 times earnings for scale in a key market. Projected savings make the price tag stack up. It may be a sign of more to come.

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Germany’s Allianz agreed to buy UK-based insurer Aviva’s Polish operations for 2.5 billion euros in cash, the company said on March 26. The price includes a dividend payment of 200 million euros.

Allianz trumped rival bids from Italy’s Generali and Dutch insurer NN, sources familiar with the matter told Reuters.

Aviva’s boss Amanda Blanc has been selling assets at pace to focus on the life and general insurer's core businesses in Britain, Canada and Ireland. The company said the transaction represented a multiple of 16.9 times the Polish unit’s 2020 post-tax profit.

Allianz said the purchase would double its revenue in the Polish insurance market. It added that it was targeting 40 million euros in annual post-tax cost savings over the medium-term.

Shares in Allianz rose 1% to 214 euros by 0901 GMT on March 26.

Context News

Germany’s Allianz agreed to buy UK-based insurer Aviva’s Polish operations for 2.5 billion euros in cash, the company said on March 26. The price includes a dividend payment of 200 million euros.

Allianz trumped rival bids from Italy’s Generali and Dutch insurer NN, sources familiar with the matter told Reuters.

Allianz said the purchase would double its revenue in the Polish insurance market. It added that it was targeting 40 million euros in annual post-tax cost savings over the medium-term.

Shares in Allianz rose 1% to 214 euros by 0901 GMT on March 26.

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