Paris, 22nd July 2008
CNP Assurances and Marfin Popular Bank set up a strategic partnership in Greece and Cyprus
CNP Assurances (CNP) and Marfin Popular Bank (MPB) have agreed to enter into a long-term business partnership for the development of insurance and pensions sales by MPB's banking networks in Greece and Cyprus. This insurance partnership is expected to be extended to other countries in the future along with MPB's international expansion in Southern & Eastern Europe.
Under the terms of the agreement:
- CNP will acquire a 50,1% shareholding in MPB's insurance businesses (currently composed of 66% life insurance, 34% non-life insurance) led by Laiki Cyprialife (LCL – life insurance in Cyprus), Laiki Insurance (LI – non-life insurance in Cyprus), Marfin Life (ML – life insurance in Greece), Marfin Brokers (MB – non-life broker in Greece) and will assume management control of these companies,
- The business partners will enter into a 10-year renewable exclusive distribution agreement with an extension option in the countries where MPB develops.
The partnership's key strategic objectives are:
- In Cyprus which is a fast growing market the combined group aims to further strengthening LCL and LI's strong positioning which is reflected in market shares of 25% and 15% of domestic life and non- life businesses respectively.
- In view of its low penetration levels, Greece offers significant growth potential. In that market the partnership will enable MPB to offer a comprehensive product offering thus significantly improve its positioning and as a result attain a market share in insurance and pensions commensurate to its overall banking market share of 5%.
As a result of this agreement, MPB will receive from CNP an up-front consideration of €145 million, plus an earn-out of about €20 million linked to business objectives. The structure of the transaction will also involve a pre-dividend payable to MPB of €20 million. This self-financed transaction will have a positive impact on CNP's earnings per share from 2009 and will be neutral from a solvency perspective. MPB is expected to register a pre tax capital gain of approximately €60 million from the completion of this transaction which is expected to be finalised by the end of the year, once the necessary regulatory authorisations have been obtained.
Efthimios Bouloutas, MPB's Group Chief Executive Officer, said, "We are delighted for our strategic partnership with CNP. We believe that MPB's positioning, offering a combination of a leading position in Cyprus and an expanding distribution infrastructure consisting currently of 170 branches in Greece, combined with CNP's long standing experience and expertise in insurance business will make this partnership a true success story. The partnership will also enable MPB to grow faster in insurance business in Southeastern Europe."
"MPB is a very dynamic bank and we are delighted to have them as our business partner," said Gilles BENOIST, Group Chief Executive Officer of CNP Assurances. "We should also have opportunities to create value together not only in Greece and Cyprus but also in other countries where MPB is already present, such as Romania, Ukraine and Serbia. Moreover, the agreement is fully aligned with our Horizon 2012 strategy which focuses external growth in three priority markets: Southern Europe, Central Europe/Eastern Europe/Mediterranean Arc and Latin America."