7th Jun 2007 07:30
Royal & Sun Alliance enters into joint venture agreement in Eastern Europe &Russia Royal & Sun Alliance Insurance Group plc (R&SA) announces the signing of anagreement to acquire 50% of GD II - Global Direct Insurance Investments B.V.(GDI), a joint venture with Direct Insurance Financial Investments Ltd (DIFI),to access the fast growing Eastern European and Russian insurance markets. Thejoint venture is consistent with the Group's emerging markets' strategy and willaccelerate delivery of a direct personal lines proposition in the region. As previously announced, R&SA will pay £44m in cash for a 50% shareholdingtogether with a further £44m to fund future growth, £16m of which will becontributed at completion for working capital requirements. Completion of the transaction is subject to a number of conditions includingobtaining DIFI shareholder approval and regulatory consents. GDI's main operation is Link4, Poland's leading direct motor insurer. Since itwas established in 2003, Link4 has grown rapidly, writing motor and householdbusiness by phone and internet. In 2006, Link4's net written premiums increasedby 42% to £30m. The joint venture intends to replicate this successful Polish direct model inother attractive markets in the region. GDI recently launched DIRECT Pojistovna,a direct insurance operation in the Czech Republic and expects to start writingdirect business in Russia in 2008. Paul Whittaker, Emerging Markets CEO commented, "Across Emerging Markets thereare exciting opportunities for profitable growth and we have already establishedstrong positions in Asia and Middle East, Latin America and the Baltics. Thisjoint venture gives us a strong platform to lead the development of the EasternEuropean direct market. Link4 has built real momentum in Poland and we will lookto replicate this successful model in the Czech Republic and Russia." For further information: \* TAnalysts PressShona Cotterill Phil Wilson-BrownTel: +44 (0) 20 7111 7212 Tel: +44 (0) 20 7111 7047 Andrew Wigg Sarah HilyerTel: +44 (0) 20 7111 7138 Tel: +44 (0) 20 7111 7327\* T Notes to Editors: 1. DIFI was established in 1994 and is listed on the Tel Aviv Stock Exchange. It is the 9th largest insurance company in Israel and the number 1 direct motor insurer with 13% market share. 2. The formation of the Joint Venture follows the announcement in November 2006 by R&SA and DIFI of the signing of a framework agreement to form a joint venture to access markets in Eastern Europe and Russia. Important Disclaimer This press release contains forward looking statements as defined in the U.S.Private Securities Litigation Reform Act of 1995. The forward looking statementsare based on management's current expectations or beliefs as well as a number ofassumptions about future events, and are subject to factors and uncertaintiesthat could cause actual results to differ materially from those described in theforward looking statements. The agreement is subject to the execution ofdefinitive documents by the parties. The Company does not assume any obligationto update any forward looking statements, whether as a result of newinformation, future events or otherwise. Copyright Business Wire 2007Related Shares:
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