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Bank Pekao SAPekao lender and PZU insurer merger model to depend on recommendations received by MAP, says minister
The final model for the merger of listed lender Pekao and listed insurance group PZU will depend on the recommendations received by the Ministry of State Assets (MAP), Poland's state assets minister Wojciech Balczun told the Onet Rano programme.
"The process concerning the so-called Danish compromise is within the remit of the management boards of both entities, i.e. Pekao and PZU. Steering committees are working on it. We have very limited access to information. The same applies to other shareholders, because those are the rules. We are waiting for recommendations and the outcome of this work," said Balczun when asked about the merger of Pekao and PZU.
"The final model that will be adopted will depend on the recommendations we receive. We will analyse them in great detail. My task in this process, if it goes ahead, is to protect the interests of the State Treasury," he added.
Balczun also pointed out that a scenario needs to be developed in case President Karol Nawrocki does not agree to the merger, as four laws would need to be amended for it to take place.
"I am aware that this potential transaction is of a reference nature. It will be quite unprecedented on such a scale, if it goes ahead, of course. However, what I expect is the presentation of various options and scenarios, because we must also be prepared for the possibility that the legislative issues necessary for this process will not be approved by the president," he stressed.
"When it comes to the market or regulator's assessment of this, we are receiving rather positive signals. For example, Poland's financial market regulator KNF is quite positive about the fact that significant capital will be released, which could significantly increase lending. (...)," he added.
At the beginning of June, PZU and Bank Pekao signed a memorandum of cooperation with a view to merging. Under the agreement, the new group would be headed by the bank, not the insurer.
To achieve this, it will first be necessary to split PZU by separating a holding company and a wholly-owned subsidiary conducting operations in the field of property and other personal insurance. Then, the PZU holding company would be merged with Bank Pekao as the acquiring entity.
Ultimately, Bank Pekao would be listed on the Warsaw Stock Exchange, and PZU shareholders would receive Pekao shares currently held by PZU, as well as newly issued shares of the bank. After the entire transaction, the State Treasury's share in the new entity would amount to approximately 27 percent.
mcb/ ao/
