ITALIAN insurance giant Generali yesterday paid €2.5bn (£2bn) to take full control of an eastern European joint-venture with Czech firm PPF.
It is the first major decision made by Mario Greco, Generali’s new chief executive, as part of the strategic review that followed his appointment last August.
Generali said eastern Europe was now its fourth biggest market and growing faster than western Europe, with gross premiums totalling €4bn at the end of 2011, up from €1bn in 2007.
Greco insisted the deal would enable his firm to concentrate resources on a high-growth business area: “This transaction eliminates all uncertainty over our development strategy in Central and Eastern Europe and the resources required from the group to put it in place.”
The joint-venture between PPF and Generali, known as GPH, was only formed in 2007. PPF is owned by Petr Kellner, the Czech Republic’s richest man, who may walk away with a healthy profit.
As part of the deal PPF will pay €80m to retain the joint-venture’s operations in Russia, Ukraine, Belarus and Kazakhstan.