HUNGARY: CIG Pannonia to merge MKB insurers into its units

Hungarian insurer CIG Pannonia announced it will merge into its units (CIG Pannonia Life Insurance and CIG Pannonia First Hungarian General Insurance) the two MKB insurers recently acquired: MKB Life Insurance and MKB General Insurance.

CIG Pannonia aquired MKB Insurance from Versicherungskammer Bayern late last year.

According to the agreement, CIG Pannonia First Hungarian General Insurance acquired 98.98% ownership in MKB General Insurance, while CIG Pannonia Life Insurance acquired 98.97% ownership in MKB Life Insurance.

The Competition Council of the Hungarian Competition Authority authorized the acquisition on 28 October 2016, while the National Bank of Hungary authorized the acquisition on 22 December 2016.

According to Budapest Business Journal, after the completition merger, MKB Bank will not wish to retain its minority stake. MKB Bank will be entitled to receive the countervalue of its stake in cash.

The same source mentioned that CIG Pannonia paid under HUF 1 billion for MKB units: "The price was well under its fair market value, according to data in an earnings report that showed that the fair value of the net assets of MKB Insurance, which comprises a general insurance and a life insurance unit, stood at HUF 3.4 billion on January 1, 2017".

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