UPDATE 2-Croatia sells stake in top insurer to local firm Adris
(Releads with govt decision, adds quotes)
ZAGREB Dec 18 (Reuters) - Croatia decided on Wednesday to sell part of the country's biggest insurer Croatia Osiguranje (CO) to local tobacco and tourist group Adris, which will have the controlling stake.
The newest European Union member is struggling to contain its budget gap and public debt and is privatising non-strategic assets to that end.
Adris's bid was higher than that of its rival for acquiring a stake in CO, Polish state insurer PZU.
"We found a good partner for further expansion of CO's business at home and on other markets in southeastern Europe," Finance Minister Slavko Linic told a cabinet session.
Adris offered 970.45 euros ($1,332) per share for a 39.05-percent stake of CO and a capital boost of 110 million euros.
PZU offered 800 euros per share for a 44.27-percent stake and a capital boost of 51 million euros.
The government now owns slightly over 80 percent of CO, whose market share is around 30 percent.
Linic said that after the capital boost the government would own 28 percent of CO.
"It is enough to have influence on business policy," Linic said.
Zagreb has already been placed under the EU's Excessive Deficit Procedure (EDP), a tool devised to force member states to respect deficit and debt ceilings.
The sale of Croatia Osiguranje stake to Adris would bring the budget a revenue of 905 million kuna ($162.76 million). ($1 = 0.7283 euros) ($1 = 5.5605 Croatian kunas) (Reporting by Igor Ilic; Editing by Alison Williams)
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