Norwegian insurer Gjensidige Forsikring (Gjensidige) has agreed to divest its Baltic subsidiary, ADB Gjensidige, to ERGO International.
The transaction awaits regulatory approvals.
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Under the agreement, Gjensidige will sell 100% of the Baltic unit for €80m ($86.8m), which will be paid entirely in cash upon deal completion.
The sale price, which is subject to adjustments, reflects a price-to-book multiple of two times for ADB Gjensidige.
With a workforce of 659, ADB Gjensidige provides general insurance products, serving both private and commercial customers in Lithuania, Latvia and Estonia.
The divestiture is not expected to significantly affect Gjensidige Group’s financials, and the company’s financial targets remain unchanged.
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By GlobalDataHowever, it is projected to result in an accounting loss of approximately Nkr120m, which will be recognised in Q3 2024.
On the positive side, the sale is projected to enhance the group’s solvency ratio by around four percentage points at closing.
Gjensidige CEO Geir Holmgren noted: “Creating a leading Nordic P&C [property and casualty] company is a key priority for me. A strong commitment to improve profitability and growth in the Nordics has been important for me from day one. The sale of our Baltic business supports such a strategy and shows our clear Nordic market focus, which is aligned with our core competence and capabilities.
“The divestment of Gjensidige Baltics is a result of our strategic review. We believe that this transaction creates the best long-term value for our shareholders and enables us to focus all efforts on our core markets in the Nordics.”
Earlier this year, Gjensidige Pensjonsforsikring, a unit of Gjensidige, deployed Sapiens CoreSuite for life and pensions, becoming the first Nordic customer to implement the solution.
