SERBIA: Slovenian TRIGLAV would like to buy DDOR COMPANY in Serbia. DDOR representatives say: “We are not for sale”
President of the Management Board of the Slovenian TRIGLAV, Matjaz RAKOVEC, said this company was interested in buying the Croatian CROATIA Insurance and the Serbian DDOR. After only several days, this statement caused a stock price jump of TRIGLAV on the Ljubljana Stock Exchange. The General Manager of DDOR Company, Christian Otto NOE, characterized this statement as a “creation of market rumors before serious business intention was expressed” and said that DDOR was not for sale.
Late last year, the Slovenian government launched the idea of selling the state ownership in large companies, among which in TRIGLAV Insurance – despite the fact that, prior to the crisis, this country did not regard privatization with sympathy. The Slovenian government has 63 percent of the ownership in TRIGLAV, but it has not been decided to date how it will be offered to another owner and to what percentage. Commenting on the possible privatization, TRIGLAV CEO, Matjaz RAKOVEC, expressed his hope that the new owners would be chosen according to their orientation towards expanding the company in the region rather than according to the amount they were ready to offer.
RAKOVEC said that TRIGLAV would gladly participate in tenders for the Croatian CROATIA Insurance and for the Serbian DDOR Novi Sad, since it would thus increase the company’s market share in the region to 35 percent. However, he added that, “at the time there was not enough capital, given that these two investments would require about EUR 400 million”. He recalled that TRIGLAV had an agreement with the International Finance Corporation IFC – the World Bank institution, according to which it would become the insurance hub for the entire South Eastern Europe.
Only two days after this statement, the value of TRIGLAV shares increased: “The price of TRIGLAV shares jumped by 3.75 percent to EUR 16.60 after the largest Slovenian insurance group expressed strong interest in acquiring the Croatian CROATIA Insurance and the Serbian DDOR, and after disclosing the data on certain preliminary results of TRIGLAV business operations in 2012. According to certain estimates, TRIGLAV needs a capital increase for some potential acquisitions – about EUR 250 million for CROATIA Insurance and about EUR 80 million for DDOR. The current market share of TRIGLAV in Croatia and Serbia is less than 5 percent”. This has been disclosed in the daily publication IC EQUITY ESPRESSO, the business portal of INTERCAPITAL, and published by the Croatian media.
ADRIS GROUP ROVINJ has been interested in CROATIA Insurance for some time, but the Polish PZU company has been recently mentioned in the Croatian press as the favorite. PZU General Manager stated that this company had almost EUR 3 billion available for acquisitions. Moreover, the Croatian insurance circles have recently rumored about the Austrian UNIQA company as a party interested in this acquisition.
However, the General Manager of DDOR Company, Christian Otto NOE, answered to Matjaz RAKOVEC’s statement by saying that DDOR was not for sale. “Some of the parties that publicly expressed such interest obviously lack money for any transaction of this kind. Therefore, these negotiations are pointless from the very beginning, and these are rather market rumors than serious business intentions”, says the press statement.
DDOR Novi Sad Company, formerly one of the two largest state-owned companies in Serbia, was sold in 2008 to the Italian Insurance Company FONDIARIA SAI. The owner was changed once again when FONDIARIA became a part of the Italian UNIPOL Group mid-November 2012. In the meantime, DDOR market share significantly decreased, from 28.2 percent in 2007 to 17.21 percent in 2011.
According to initial estimates of the 2012 business results disclosed by TRIGLAV, this company gained EUR an 89.7 profit and a net income of EUR 73.2 million.
Matjaz RAKOVEC said earlier that the Western Balkans was a natural market for TRIGLAV as it was well known, and added that this Slovenian company had opportunities for significant growth on the Serbian and Croatian markets.