Greece-based lender Piraeus Bank has reached an agreement to dispose 100% of ATE Insurance to ERGO Insurance Group, a subsidiary of Munich Re, as part of plans to boost its balance sheet.
Under the terms of the agreement, the cash-strapped Piraeus will receive a total consideration of 90.1m in cash, subject to customary net asset value adjustments upon closing.
The transaction is likely to complete by the end of 2014, pending receipt of the concerned regulatory approvals.
Piraeus Bank is majority owned by Greece’s bank bailout Hellenic Financial Stability Fund (HFSF).
Commenting on the deal, Piraeus Bank CEO Anthimos Thomopoulos said: "Today Piraeus Bank has made a significant step forward in executing its strategy to gradually exit non-banking operations, redirecting its resources and management focus to core banking activities.
"The strong reputation and presence of ERGO in Greece and abroad coupled with the existing long-standing bancassurance relationship between the two institutions ensure the best prospects for ATE Insurance, its employees and its customers."
Piraeus Bank acquired ATE Insurance in July 2012, as a part of its acquisition of the "good" part of ATEbank.