VIG is buying a 90% stake in BTA Baltic Insurance Company, while BTA Insurance Company SE, the current owner of the Latvian company will preserve the remaining 10% stake.
The Competition Council indicates in its ruling that the takeover deal affects three non-life insurance markets in Latvia - the motor third party liability (MTPL) insurance market, guarantee insurance market, as well as the travel insurance market.
Upon assessing the deal's impact on competition, the watchdog came to the conclusion that the affected markets are characterized by types of short-term insurance and stiff competition and that the takeover will not restrict clients' choice of services providers. The Competition Council also does not expect the deal to create any significant obstacles that might prevent new players from entering the market or the existing ones from expanding their operations.
According to VIG's annual report for 2015, the BTA acquisition deal will strengthen the insurance company's long-term position in the Baltics, allowing VIG to become a major player in the Baltic region in both life and non-life insurance.
VIG has already considerably strengthened its presence in the Baltic countries by acquiring the Lithuanian distribution company Compensa Life Distribution and Latvian non-life insurer Baltikums, and by establishing a new company, Compensa Non-Life, in Lithuania. As a result, VIG is now one of the top three insurers in the Baltic non-life insurance market. The huge potential of the region, which recorded average economic growth of around 2% in 2015, was already apparent to VIG in 2008. VIG successfully entered Estonia at that time with its acquisition of Group company Compensa Life.
VIENNA Insurance Group is one of the largest insurance groups in Central and Eastern Europe. VIG already has a branch of Compensa Life Vienna Insurance Group SE (life insurance) and a branch of Compensa TU S.A. Vienna Insurance Group (non-life insurance) operating in the Latvian market.
BTA Baltic Insurance Company (BTA Baltic) is a subsidiary of BTA Insurance Company SE (BTA) that started operations in the Baltic States on July 1, 2015, following the successful completion of the reorganization process by separating business activities in the Baltic States and the rest of Europe. BTA Baltic has received a license for all types of insurance services, which allows the company to offer customers all kinds of insurance services in the Baltic countries Latvia, Lithuania and Estonia.
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