Generali and PPF combine central and eastern Europe businesses

A new agreement will unite all of Assicurazioni Generali's and PPF group's insurance assets in the central and eastern European (CEE) region.

PPF group owns Ceska pojistovna, an insurer in the Czech Republic, as well as a consumer credit business in 5 eastern European countries

Commenting on the agreement, Sergio Balbinot, Generali co-chief executive said: “Generali's historical ties to the CEE region are well known. Since returning to Hungary we have developed our presence so that we currently operate in 10 countries, serving some 4 million customers. To further this success, we have been looking for the right partner with whom we can take the business to its next stage of development.

Ladislav Bartonicek, chairman of Ceska pojistovna board of directors, added: “We believe this partnership is a perfect commercial, cultural and strategic fit for Ceska pojistovna Group. We operate in complementary markets and the potential for collaboration is compelling. Joining forces with Generali represents the logical next step in Ceska pojistovna's development and will provide an excellent opportunity to gain a leading position in the CEE insurance market, strengthening the growth platform in the high-potential CIS countries as well.”

Key elements of the joint venture agreement (JV) include:

The new joint venture “JV” will be 51% owned by the Generali Group and 49% by the PPF Group.

Based on pro-forma 2006 data, the JV's annual gross written premiums will exceed € 2.6 billion, with an Embedded Value of € 2.3 billion and over 9 million customers in 12 countries

In addition to its contribution of assets to the joint venture, Generali will pay PPF Group €1.1 billion in cash to achieve its 51% share of JV

Petr Kellner, controlling shareholder of PPF, will be nominated to the list of Generali Board members to be proposed at the next Annual General Shareholders Meeting

Sergio Balbinot, co-chief executive of Assicurazioni Generali, will be the chairman of JV; Ladislav Bartonicek, chairman of Ceska pojistovna board of directors, will be the CEO of JV;

The agreement values Ceska pojistovna at €3.6 billion and Generali's CEE assets at € 1.5 billion