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Bank Pekao SAUPDATE: PZU insurer and Pekao lender to cooperate in group reorganisation; merger planned
Listed insurance group PZU and listed lender Bank Pekao have signed a memorandum of cooperation regarding the reorganisation of the group and, in effect, the demerger of PZU through the spinoff of a holding company and an operating subsidiary. The PZU holding company will then be merged with Bank Pekao as the acquirer, PZU and Pekao said in a joint press release.
According to the memorandum, it is the intention of the parties to complete the potential transaction, i.e. the merger of Bank Pekao and PZU, following the spinoff of its operations, by June 30, 2026.
Completion of the transaction is subject to a number of factors, including the parties agreeing the relevant transaction documentation, the entry into force of the relevant legislative changes, the receipt of a number of regulatory approvals and the granting of the relevant corporate approvals by the general meetings of shareholders of PZU and Pekao.
As stated, both brands will retain their identities, separateness and autonomy of operation in their business areas, just as they have for many years within the PZU group, but the new group will be headed by a bank rather than an insurer. The demerger of PZU will take place through the spinoff of a holding company and a 100 percent subsidiary operating in non-life and other personal insurance. The PZU holding company will be merged with Bank Pekao and ultimately one company will be listed on the Warsaw Stock Exchange.
"The parties anticipate that the potential implementation of the potential transaction could result in the release of significant capital surpluses of the group, estimated at between approximately PLN 15 billion and approximately PLN 20 billion, compared to the capital adequacy and solvency requirements that would have to be applied from 2027 onwards (due to the amendment of the Solvency II Directive) in the current group structure," Pekao and PZU said earlier in the market filing.
As stated, the entity created from the merger of the largest insurer and the second largest bank in Poland will have, among other things, an approximately PLN 200 billion (EUR 47.1 bln) greater lending potential compared to the group's current model.
The parties have also agreed to work out the optimal strategy in relation to the future of listed lender Alior Bank while working on the potential transaction.
The management boards of PZU and Bank Pekao, under the guidance of both companies' CEOs, are preparing a detailed schedule of planned activities to fulfil the provisions of the memorandum of cooperation and plan to present it to the public soon.
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