Gjensidige acquires PZU Lietuva in Lithuania

Gjensidige Forsikring ASA has on 2 February 2015 agreed to acquire 99.88 per cent of the shares in PZU Lietuva from PZU SA for EUR 54 million. The acquisition is in line with Gjensidige’s strategy to grow in the Nordic region and the Baltics. The Group’s market share in the Baltics will increase from approximately 7 per cent to approximately 13 per cent. The market share in Lithuania will increase from approximately 7 percent to approximately 21 percent.

PZU Lietuva offers general insurance products primarily within the motor, property and personal lines in Lithuania. The company also has operations in Estonia and Latvia, but these will be separated out before final closing and they are not part of the transaction.

Gross premiums written for the acquired business in Lithuania were approximately EUR 50 million in 2014. Around 40 percent came from the private market and around 60 percent from the commercial market. The products are distributed through brokers, agents, banks and via the internet, as well as by direct distribution through the company’s own offices.

“PZU Lietuva fits well with our business in the Baltics, and gives us critical mass in a market where we expect solid growth”, says CEO Helge Leiro Baastad.

Gjensidige sees a potential for growth and enhanced profitability in the Baltics. The Group has therefore decided to increase its involvement in this market going forward by increasing investments in its current operations and through this acquisition. The acquisition will make Gjensidige one of the biggest general insurance companies in the Baltic market. The company will thereby play a more central role in the Baltic general insurance market as it develops and matures.

“We believe that the structural changes that have taken place in the Baltic market in the last year will contribute to a necessary shift towards a more rational and profitable industry”, says Baastad.

As part of Gjensidige’s increased focus on the Baltics, the business will be organised under the Technology and Development business area, focusing on implementing Group processes, sharing best practice and further improving infrastructure.

“The acquisition of PZU Lietuva gives us possibilities for synergies in the whole of our business in the Baltics, among other things by coordinating IT-systems, claims handling, distribution networks, reinsurance and support functions”, says Executive Vice President for Technology and Development, Kaare Østgaard.

“We will at the same time make significant investments in these areas. Together with integration costs, this will contribute to a weaker profitability in the Baltics in the short term. Over time however, these measures will result in better profitability. The synergy potential that has been identified is expected to be realised with full effect as from 2018”, Østgaard adds.

According to the agreement with the seller, the final closing is expected to take place at the beginning of the third quarter 2015, contingent upon approval from the relevant authorities. Integration of the two entities is expected to begin immediately thereafter to ensure that synergies can be realised as soon as possible.

Isolated, the transaction is expected to affect the strategic capital buffer by approximately NOK 500 million.


PZU Lietuva: PZU Lietuva is the third largest player in Lithuania, with a market share of 13.8 percent as of third quarter 2014, and with gross written premiums in this market of some EUR 50 million in 2014. PZU Lietuva has some 560 employees. The 0.12 percent share not acquired by Gjensidige is owned by a local investor. The minority share will not impede the integration of PZU Lietuva with Gjensidige’s Baltic operation.

Gjensidige Forsikring:Gjensidige is a leading general insurance company in the Nordic region with operations in Norway, Denmark, Sweden and the Baltics. Operating income was NOK 21 billion in 2013, and the Group has around 3,400 employees before the take-over of PZU Lietuva.

Gjensidige entered the Baltics in 2006 through the acquisition of Parekss Insurance. RESO Europa was acquired in 2008 and a portfolio from Länsförsäkringar in 2009. The market share in the Baltics was 7.1 per cent as of third quarter 2014. Gjensidige offers general insurance in Estonia, Latvia and Lithuania with some 380 employees and a considerable number of insurance agents throughout the three countries. Gross premiums written in the Baltic segment were approximately NOK 510 million in 2014.

This information is subject to disclosure under the Norwegian Securities Act section §5-12

Contact persons Gjensidige Forsikring ASA:Head of Investor Relations: Janne Flessum, Tel: +47 915 14 739
Head of Media Relations: Øystein Thoresen, Tel: +47 952 33 382