Fairfax buys Greece’s Eurobank insurance unit for $480M
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Greece’s third-largest lender Eurobank has agreed to sell an 80 per cent stake in its Eurolife ERB insurance arm to Canada’s Fairfax Financial Holdings (FFH.TO -0.12%) for €316-million ($480-million Canadian), deepening their existing relationship.
The cash deal is in line with Eurobank’s strategy of gradually exiting from non-banking operations to focus on core banking. It also complies with a restructuring plan approved by the European Commission.
Investment holding group Fairfax already owns 17 per cent of the Greek lender after taking part in its recapitalization last month. Eurobank will retain a 20 per cent stake in Eurolife.
The sale will boost Eurobank’s core tier 1 capital ratio by about 26 basis points to 17.8 per cent, it said.
Eurolife is the third largest insurer in Greece with a market share of about 10 per cent, providing life and non-life insurance products.
“The long term collaboration with Fairfax is expected to sustain the competitiveness and future growth of the Eurolife group for the benefit of its customers and employees,” Eurobank said.
The deal, subject to regulatory approvals, is expected to be completed before the end of the third quarter of 2016.
Bank of America Merrill Lynch and Mediobanca advised Eurobank on the deal.
The cash deal is in line with Eurobank’s strategy of gradually exiting from non-banking operations to focus on core banking. It also complies with a restructuring plan approved by the European Commission.
Investment holding group Fairfax already owns 17 per cent of the Greek lender after taking part in its recapitalization last month. Eurobank will retain a 20 per cent stake in Eurolife.
The sale will boost Eurobank’s core tier 1 capital ratio by about 26 basis points to 17.8 per cent, it said.
Eurolife is the third largest insurer in Greece with a market share of about 10 per cent, providing life and non-life insurance products.
“The long term collaboration with Fairfax is expected to sustain the competitiveness and future growth of the Eurolife group for the benefit of its customers and employees,” Eurobank said.
The deal, subject to regulatory approvals, is expected to be completed before the end of the third quarter of 2016.
Bank of America Merrill Lynch and Mediobanca advised Eurobank on the deal.
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