Ageas and Haci Ömer Sabanci Holding A.S. ("Sabanci") announced today that they have agreed to jointly acquire additional shares in Aksigorta A.S. ("Aksigorta") to further strengthen the partnership between the two groups.
Both Sabanci and Ageas currently own 30.99% of the shares in Aksigorta. The intention of both parties is to acquire, within the next 12 months, an equal number of shares in Aksigorta through the Istanbul Stock Exchange. The number of shares acquired will be dependent upon the share price evolution of Aksigorta, but will not exceed 10% of the total number of shares outstanding. Regulatory approval will be sought, when relevant thresholds are exceeded.
On 18 February 2011 Ageas already acquired a 30.99% stake in Aksigorta, from Sabanci for a total consideration of $ 220m (€ 162m) in cash.
Aksigorta is the fourth largest non-life insurer in Turkey with gross premiums of YTL 886m (€ 415m) in 2010 and a market share of 8%. Motor insurance represents almost 50% of its premium income, followed by Fire (18%) and Health (14%). Aksigorta entered into a 15-year exclusive agreement with Akbank (controlled by Sabanci) for the distribution of non-life products which can thereafter be renewed for periods of 5 years.
Akbank has a network of 913 branches serving 8 million customers. In 2010 the bank channel generated 13.4% of gross written premiums of Aksigorta. Aksigorta also has an agency network.
Ageas started to consolidate its quota share in Aksigorta earnings in the course of 3Q11.
Our View:
We view this additional acquisition in a fast growing market and with decent market share, to be a positive.
ISIN code of Aksigorta: TRAAKGRT9105
Conclusion:
We maintain our Buy rating and € 2.85 target price.