Two left in the race to buy Turkey's Yapi Kredi sigorta

Italy's Assicurazioni Generali SpA and Zurich Financial Services were the two companies still in the frame to acquire the assets, the report said citing two unnamed sources.

 

Other sources had said previously that offers could be in the range of 600 million to 800 million euros and that the sales process was expected to be completed by the end of the third quarter.

 

Yapi Kredi Bank, one of Turkey's largest private banks, is owned by Italy's UniCredit SpA and Turkish conglomerate Koc Holding owns the majority of the insurance company, had hired Merrill Lynch and Unicredit CAIB as advisors to help it reorganize its operations in the insurance sector.

 

Zurich had entered the Turkish insurance market in January by acquiring the general insurer TEB Sigorta A.S. from TEB Mali Yatirimlar A.S. for $200 million.

 

If Zurich closes the deal to buy Yapi Kredi Sigorta, it would raise its market share to 7.12 percent from the existing 1.41 percent with TEB Sigorta.

 

Zurich Financial declined to comment.

 

With the sale of Yapi Kredi Sigorta around 80 percent of Turkey's 9 billion-dollar insurance sector would be belong to foreign companies. However the biggest problem seen in the sector is low profit margins, which is expected to recover in the coming years.

 

Turkey's fast-growing and fragmented insurance sector has seen a wave of foreign acquisitions in the last couple of years.

 

In the latest wave of foreign acquisitions in the sector, OYAK, the army pension fund, had sold its 50 percent stake in the insurance company to its French partner AXA for $525 million. Dutch Aegon bought Ankara Emeklilik, while Koc Holding sold its shares in the insurance companies to its partner Allianz for $600 million.

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