Polish insurer PZU lines up $2.4 billion for acquisitions

WARSAW Fri Oct 5, 2012 9:52am EDT

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WARSAW (Reuters) - Eastern Europe's top insurer, Polish state-controlled PZU PZU.WA, is planning to spend its 7.5-billion zloty ($2.4 billion) cash pile to buy assets beyond its home market, its chief executive said.

The group, valued at $10 billion, holds a leading position in Poland - a legacy from the communist era when PZU was the market by some distance.

Any attempt to buy insurers inside Poland would attract anti-monopoly investigation, forcing it to look for scale abroad.

"We are interested in all insurer's assets in the region which will be put up for sale," PZU CEO Andrzej Klesyk told Reuters in an interview.

Media has speculated the group could buy the eastern European assets of Dutch ING Groep (ING.AS) and those of Italy-based Assicurazioni Generali (GASI.MI). PZU has confirmed interest only in Croatian insurer Croatia Osiguranje.

The group is also looking further east, planning to expand in the Baltics via its Lithuanian operation, PZU Lietuva.

"PZU Lietuva got our corporate green light to cover clients in Estonia and Latvia as well. This will contribute to expanding in those countries," Klesyk said.

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PZU's principal rival in the Polish market is Germany's third-largest insurer Talanx (TLXGn.DE). It acquired Polish insurers TU Europa and TUiR Warta and is combining them to create Poland's second-biggest player.

Locally, the Polish insurer is focusing on acquisitions outside its core business, with 5 billion zlotys of free cash, which it says could be raised to 7.5 billion with a loan.

CEO Klesyk adds PZU has drawn up a list of potential partners among private equity funds, which in case some big transaction shows up could double the amount.

"But there's no such deal on the horizon," he said.

PZU has been mentioned as a potential buyer in several transactions in Poland. These include the planned sale of local medical services group Lux Med, the privatisation of real estate group PHN, or the sale of lower-tier lender Alior Bank.

Klesyk said the most likely scenario for Lux Med was that PZU would not take a direct stake itself but would offer a loan to the buyer.

He said his firm was seeking a direct stake in Alior, owned by the Italian-based Carlo Tassara group, an investment vehicle of French businessman Roman Zaleski.

Asked about media reports that PZU was planning to buy Alior together with private equity group Apax APAX.UL, Klesyk said: "We have no ambition to be a majority shareholder in any bank."

"We do not exclude taking a minority stake in Alior Bank... Let me underline that this would be a long-term financial investment."

(Writing by Adrian Krajewski)

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