The supervisory boards of insurance companies Slovenica and Adriatic endorsed the proposed merger that will create the second largest insurance group in the country with annual insurance premiums in excess of SIT 44bn (EUR 183.6m)
The supervisory boards of insurance companies Slovenica and Adriatic on Tuesday, 24 May endorsed the proposed merger that will create the second largest insurance group in the country with annual insurance premiums in excess of SIT 44bn (EUR 183.6m). Pending approval in June by the shareholders of both companies, the new company, Adriatic Slovenica, will be incorporated in the second half of the year and based in Koper, the chief of the Slovenica supervisory board, Matjaz Gantar, told the press.
"The united insurance company has ambitious plans on the domestic market, where it intends to increase its market share, while it also plans a more aggressive approach to foreign markets," according to Janez Bojc, the top supervisor at Adriatic.
The two companies anticipate synergies of SIT 2.5bn (EUR 10.4m) through cost-cutting, reduction in operating assets and increase in volumes. It is expected that the merger will create 164 redundant employees, but only 10 are to be permanently laid off until 2009.
"We are convinced that the merger makes economic sense and that we will have plenty of good results in the future," said Anton Koncnik, the chief executive of Slovenica. "The merger means even better-quality services for our customers."
The majority shareholder of the merged company will be KD Holding (a part of the KD Group) which owns almost 100% of Slovenica already. Slovenica in turn holds a 51% stake in Adriatic. KD Holding will own 64% of Adriatic Slovenica. The swap ratio is 0.38 Slovenica shares for one Adriatic share.
KD Group had tried to sell both insurance companies in 2003. Although three companies carried out due diligence, only one made an offer. Yet since the bid was not in line with the expectations of the owner, the sale was aborted.
Source: Slovene Press Agency STA