Germany’s Allianz has agreed to buy Turkish insurer Yapı 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 Yapı Kredi Sigorta, the insurance arm of Yapı Kredi Bank, declined to comment.
Yapı 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 Yapı Kredi Sigorta — a joint venture between Turkish group Koc Holding and Italian bank UniCredit.
“Dai-ichi was bidding for the life part only but Yapı 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 global insurers.
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.