February 2, 2018 / 10:54 AM / a year ago

CORRECTED-Germany's Allianz buys Sri Lanka Janashakthi's general insurance unit

(Corrects last paragraph to say “compete”, not “complete”)

COLOMBO, Feb 2 (Reuters) - German insurer Allianz SE on Friday entered into an agreement with Janashakthi Insurance Plc to acquire 100 percent of the latter’s subsidiary Janashakthi General Insurance Ltd for 16.4 billion rupees ($106.4 million).

Shares in Janashakthi jumped 27.5 percent on Friday, and were up 72.7 percent for the week.

With this acquisition, Allianz Insurance Lanka, the local arm of Allianz, becomes one of the country’s largest general insurers with a market share of around 20 percent, a joint statement from the companies said.

Ceylinco Insurance and state-run Sri Lanka Insurance Corp (SLIC) have been leaders in the general insurance sector with market shares of 19.2 percent and 19.1 percent respectively as of 2016, a government report showed.

Zakri Khir, a member of Allianz Asia’s executive board, said the deal has put the company in a very good position as the combined entity would take them very close to the top of the sector.

“Now we can compete with the market leader,” he told Reuters, adding that they are looking for strategic investments in Asia. ($1 = 154.1000 Sri Lankan rupees) (Reporting by Shihar Aneez and Ranga Sirilal; Editing by Sunil Nair and David Goodman)

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