July 12, 2012 / 7:17 AM / 5 years ago

UPDATE 1-Cigna buys 51 pct of Turkey's Finans Emeklilik

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* Cigna buys stake for 85 million euros

* U.S. insurer gains access to fast-growing market

* Finansbank to retain 49 percent stake

By Daren Butler

ISTANBUL, July 12 (Reuters) - U.S. insurer Cigna Corp has signed a deal to buy a 51 percent stake in Finansbank's wholly owned insurance unit Finans Emeklilik for 85 million euros ($104 million), giving it access to the fast growing Turkish market.

Finansbank, owned by National Bank of Greece, said it will retain the remaining 49 percent in the pensions and life insurance company, the sixth largest bancassurance company in Turkey.

Turkey, the fastest growing economy in Europe with expansion of 8.5 percent last year, is becoming increasingly attractive to foreign insurers looking to diversify away from competitive and mature home markets where there is less chance for growth.

"The joint venture will provide Cigna with opportunities to reach and serve a rapidly expanding middle class market in Turkey through Finansbank's network of retail banking branches," Cigna said in a statement.

Sources familiar with the matter had told Reuters on Wednesday that Cigna was buying the stake, fending off competition from France's Axa and Aegon of the Netherlands.

Cigna also entered into a long-term distribution agreement with Finansbank, Turkey's fifth largest private bank by assets, for the distribution of insurance products through its network of more than 500 branches.

"Finansbank has an impressive track record of profitable growth, as well as a strong capital position," said David Fike, Chief Marketing Officer of Cigna International Health Life and Accident.

"Turkey's demographic trends, impressive economic growth and the increasing need for affordable protection present a tremendous opportunity," he added.

Finans Emeklilik was founded in July 2007 and launched its pension operations in November 2008. It had a 6.1 percent market share in 2011, and is actively growing its private pension business, generating 22,624 net new contracts in 2011.

Finansbank said on Oct. 13 that it had mandated the board to evaluate strategic options for a stake sale in Finans Emeklilik.

Cigna was advised by Citigroup Global Markets Limited.

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