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Tryg snaps up Alka Forsikring
Posted on Monday, 04 December 2017 13:12
Tryg, which claims to be Denmark’s largest general insurance player, is buying Alka Forsikring in a deal valuing the domestic rival at DKK 5.70 billion (EUR 766.00 million).

Completion is anticipated during the first half of 2018, subject to approvals from the relevant regulatory bodies.

Financed through a DKK 4.00 billion private placement of up to 10.0 per cent of the acquiror’s current outstanding share capital, the transaction is expected to increase earnings in the first full year following the purchase.

Total merger benefits of DKK 75.00 million are anticipated to be achieved in 2019, rising to DKK 150.00 million and 300.00 million in 2020 and 2021, respectively.

Established in 1944, Alka is the eighth largest property and casualty (P&C) insurance business in Denmark, with gross premiums of DKK 2.08 billion last year.

The unlisted firm, currently owned by employees, unions, companies affiliated with the unions and Folksam Omsesidig Livforsakring, has a 4.3 per cent share of the non-life insurance market and an estimated private lines market share of 6.0 per cent.

It reported net profit of DKK 319.00 million for the nine months ending 30th September 2017, which is an improvement on 2016, considering a lower net profit of DKK 235.00 million was posted for the entire twelve months.

Following the transaction, Nasdaq Copenhagen-listed Tryg will have a combined Solvency II ratio of 170.0 per cent and its market share in Denmark will rise to 22.0 per cent.

The firm recorded profit of DKK 1.99 billion (Q1-Q3 2016: DKK 1.91 billion) on gross premium income of DKK 13.20 billion (Q1-Q3 2016: DKK 13.20 billion) for the nine months ending 30th September 2017.

Group chief Morten Hübbe said the acquisition, which he described as a merger, “will strengthen our position in Denmark”.

According to Zephyr, the M&A database published by Bureau van Dijk, there have been 268 deals targeting direct property and casualty insurance carriers announced worldwide so far this year.

© Zephus Ltd