(Adds details, background)
By Asli Kandemir and Sophie Sassard
ISTANBUL/LONDON, March 25 Germany's Allianz
has agreed to buy Turkish insurer Yapi Kredi Sigorta's
core insurance arm and a majority stake in its pension unit for
nearly 950 million euros ($1.2 billion), sources familiar with
the matter said on Monday.
The sources said the deal was expected to be announced in
the coming days. Both Allianz and Yapi Kredi Sigorta,
the insurance arm of Yapi Kredi Bank, declined to
Yapi Kredi Sigorta shares closed flat on Monday at 21.60
lira, valuing the company at 2.2 billion lira ($1.2 billion).
Japanese company Dai-ichi Life Insurance and Zurich
Insurance had also been in the race for Yapi Kredi
Sigorta - a joint venture between Turkish group Koc Holding
and Italian bank UniCredit.
"Dai-ichi was bidding for the life part only but Yapi
decided separating life and non-life would cost too much,
operationally and tax-wise, so they preferred selling in one
block to Allianz," one of the sources said.
With a population of nearly 75 million whose average age is
under 30, Turkey offers lucrative growth opportunities for
Government initiatives to encourage savings through private
placement plans, which became effective from the beginning of
2013, have made the business more attractive.
Large deals have been few and far between in the sector
which means the sale of Yapi Kredi's insurance business will be
the largest ever in the Turkish industry.
($1 = 0.7694 euros)
($1 = 1.8146 Turkish liras)
(Additional reporting by Seda Sezer in Istanbul and Jonathan
Gould in Frankfurt; Editing by Nick Tattersall and David Cowell)