* Allianz, Dai-ichi, Zurich in the running for Yapi Kredi
* Binding bids expected on Friday
(Adds comment from Yapi Kredi, context, quotes)
By Seda Sezer and Dinesh Nair
ISTANBUL, Feb 14 Three global insurers were
expected to make binding offers for Turkish lender Yapi Kredi
Bank's insurance arm on Friday, banking sources
familiar with the matter said.
Germany group Allianz, Japanese company Dai-ichi
Life Insurance, and Zurich Insurance are in
the race for Yapi Kredi Sigorta - a joint venture
between Turkish group Koc Holding and Italian bank
UniCredit, three banking sources said.
"Binding bids will be submitted on Feb. 15," one of the
sources said on Thursday , adding the deal was expected to close
by the end of the first half.
Turkey, Europe's fastest-growing economy in 2011, is
attractive for foreign insurers looking to diversify away from
competitive home markets where there is less chance of growth.
Yapi Kredi Sigorta shares were up 2.7 percent at 20.65 lira
by 1228 GMT. The business has a market value of $1.2 billion,
according to Reuters data. The shares have risen 22.6 percent in
2013 and 75 percent in the past year in anticipation of a deal.
Yapi Kredi Bank said the assessment of bids for Yapi Kredi
Sigorta was continuing in line with the planned timetable.
Another insurer, Sompo Japan Insurance, was short-listed but
backed out, two of the sources said, speaking on condition of
anonymity as the matter has not been made public.
Allianz, Dai-ichi, Zurich and Sompo Japan all declined to
Citigroup is advising Allianz, with Bank of America
Merrill Lynch advising Dai-ichi, and UBS on
the Zurich side. Deutsche Bank and UniCredit are
advising the sellers.
Aside from the insurance business, Yapi Kredi Sigorta has a
pensions arm which some of the potential buyers are not
interested in keeping, the sources said.
With a population of nearly 75 million whose average age is
under 30, Turkey offers lucrative growth opportunities for
global insurers. Government initiatives to encourage savings
through private placement plans, which became effective from the
beginning of 2013, has made the business more attractive.
"Turkey is an extraordinarily interesting market. It belongs
to the few states in Europe that have a positive demographic
development," Allianz chief financial officer Maximilian
Zimmerer told Reuters in January. "We will always look at
everything (every acquisition target that is on the market)."
Large deals have been few and far between in the sector
which means a potential sale of Yapi Kredi's insurance business
will be the largest ever in the industry.
Last July, U.S. insurer Cigna Corp agreed to buy a 51
percent stake in Finansbank's wholly owned insurance
unit Finans Emeklilik for 85 million euros ($114 million).
A company owned by former AIG chief executive
Maurice Greenberg and a unit of Dubai lender Mashreq Bank
bought the Turkish insurance arm of Dubai Group in
Yapi Kredi Sigorta made a net profit of 64.8 million lira
($37 million) for the nine-months to September 2012, compared
with 49.7 million in the 2011 period.
($1 = 0.7442 euro = 1.7635 lira)
(Additional reporting by Asli Kandemir in Istanbul, Taiga
Uranaka in Tokyo, Kathrin Jones and Arno Schuetze in Frankfurt,
and Paul Arnold in Zurich; Editing by Dan Lalor and Nick