Ergo International, the manager of the international business portfolio of the German-owned insurance group Ergo, is acquiring Lithuania’s Gjensidige, along with its branches in Estonia and Latvia, from Norway’s non-life insurance company Gjensidige Forsikring.
The companies signed the agreement on Thursday, Ergo said in a press release.
The deal, the value of which is not being disclosed, is subject to approval from the Lithuanian, Latvian and Estonian competition authorities.
Ursula Clara Deschka, chairwoman of the board at Ergo Baltic, said that the Baltic insurance markets “offer good business potential, which is in line with and supports Ergo’s business strategy”.
“By combining Ergo’s and Gjensidige’s strengths in products and sales, we will create a unique environment for further innovation and growth in the three Baltic markets,” she said.
Geir Holmgren, CEO of Norway’s Gjensidige, said the divestment of the Baltic operations is a result of the company’s strategic review.
“We believe that this transaction creates the best long-term value for our shareholders and enables us to focus all efforts on our core markets in the Nordics,” he said.
Once the deal is finalized, Gjensidige will be integrated into Ergo in the Baltics, and the operations of both companies will be merged.
Customers, partners and brokers will not be affected by the transaction: all existing contracts will remain effective and insurance cover will be provided. Following the completion of the transaction, the Gjensidige brand will remain in place for a transitional period of one year, after which it will be integrated into Ergo, according to the press release.
Gjensidige’s legal merger with Ergo will occur once the deal is approved and completed. Until then, the two companies will continue to operate separately, it said.
Lithuania’s Gjensidige turned a net profit of 4 million euros in 2023, versus a loss of 17 million euros in 2022. Its insurance revenue rose to 143.4 million euros last year, up 11.6 percent increase from 128.4 million euros the previous year.
Source: BNS
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