Oct. 22 (Bloomberg) -- Uniqa Insurance Group AG, Austria’s second-biggest insurer, agreed to buy Baloise Holding AG’s units in Croatia and Serbia for 75 million euros ($103 million).
Baloise, Switzerland’s third-biggest insurer, expects a one-time loss of 30 million Swiss francs ($33 million) from the transaction, according to an e-mailed statement today.
In November 2011, Baloise cut the valuation of the Croatian unit, Basler osiguranje Zagreb, which it bought in 2007, after reassessing the unit’s growth prospects, and said last year the Serbian unit, Basler osiguranja, will probably break even in 2014. Both subsidiaries generated a combined business volume of 68.4 million francs last year, Baloise said.
“Disposing of Croatia and Serbia makes sense” for Baloise as these units have “never achieved target returns,” Stefan Schuermann, a Zurich-based analyst with Vontobel, wrote in a note to investors today. Schuermann rates the shares hold.
The sale will allow the company “to concentrate on the German restructuring,” Schuermann said. Baloise is reviewing its German business lead by Jan de Meulder and plans to cut about 400 jobs, or 20 percent, of its employees in that country.
The two insurers expect to complete the transaction in the first quarter of 2014, pending the approval of the responsible supervisory and antitrust authorities.
Baloise shares climbed as much as 0.4 percent and were little changed at 108 francs at 9:23 a.m. in Zurich. Uniqa traded up 0.2 percent at 8.918 euros in Vienna.
Uniqa, which competes with market leader Vienna Insurance Group AG in Austria and eastern Europe, plans to double its clients by 2020 by expanding in the former communist bloc. Chief Executive Officer Andreas Brandstetter said on Sept. 24 that the Vienna-based company may use the proceeds of its $1 billion capital hike to purchase mid-sized companies in any of its 15 eastern European markets.
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