| R&SA to invest $170m in JV with Direct Insurance - The companies signed a non-binding agreement to set up a joint venture to operate in Russia and Eastern Europe
Direct Insurance -- Financial Investments Ltd. (TASE: DIFI)
today announced that it has signed a non-binding MOU to
set up a joint venture with Royal & SunAlliance Insurance
Group plc (LSE; NYSE:RSA) (R&SA). Under the agreement,
which is subject to due diligence, R&SA will invest
$170 million in Direct Insurance subsidiary Global Direct
Insurance Investments BV (GDII), in exchange for a 50 percent
stake in the company. The joint venture will mainly focus
on the direct insurance market in Russia and other CIS states,
as well as in Central and Eastern Europe.
Direct Insurance said that if the deal goes ahead, the
company would report a capital gain of NIS 300 million ($70
million).
R&SA has a market cap of ~$4.4 billion. The company
posted ~$4 billion in premiums in January-September, and
a net profit of ~$344 million.
Last week, Direct Insurance signed an agreement with the
European Bank for Reconstruction and Development (EBRD)
to collaborate on insurance activity that the company was
setting up in Russia. Direct Insurance and its partners
in Russia expect to invest ˆ120 million (NIS 670 million)
in the venture.
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