Greece turmoil may sink Munich Re deal
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(Reuters) — Munich Reinsurance Co. is considering calling off its planned €90 million ($99 million) takeover of Greece's ATE Insurance if political developments in Greece deteriorate, the company said on Thursday.
Greece's Piraeus Bank agreed to sell its ATE Insurance business to Ergo Insurance Group, a subsidiary of Munich Re, in November.
The deal has yet to receive the regulatory approvals required for closing.
Munich Re said on Thursday it hoped to close the deal swiftly, provided there was political and economic stability in the country.
The group routinely includes back-out clauses in takeovers that allow the buyer to withdraw from a deal in the case of unforeseen, extreme developments, Munich Re said in a statement responding to an article due to appear in magazine WirtschaftsWoche.
"Depending on political developments, it is quite possible that we would exercise our right to withdraw," the company said. "We are in close contact with the seller and are attuned to the possible effects that may result from the changed political situation."
The sale is part of Piraeus Bank's restructuring plan which aims at divesting noncore assets to bolster its capital position. Piraeus Bank is majority owned by Greece's bank bailout fund HFSF.
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