Aldagi BCI acquires controlling interest in Imedi L
Aldagi BCI, one of Georgia’s leading insurers and a wholly-owned insurance subsidiary of the Bank of Georgia, agreed to buy a 85% stake in Imedi L for 8 million lari, the third largest insurance business in Georgia.
Nika Gamkrelidze, the General Manager of Aldagi BCI announced that the company acquired Meta Limited, the holding company that owns a 51% share of Imedi L. The company also bought 34% equity stake in Imedi L from the European Bank for Reconstruction and Development (EBRD), bringing its total ownership of the company to 85%.
As Gamkrelidze said, the company believes that the partnership would create one of the strongest insurance companies in the market and that will ensure the delivery of stable and high quality service to the customers.
“We will continue to work towards creating the best value for all our stakeholders, especially for our employees and our customers in the country,” Gamkrelidze noted at the press conference in Tbilisi on May 4.
Moreover, Aldagi BCI agreed to inject around 32.5 million lari into Aldagi BCI to provide Imedi L with sufficient capital to meet its existing hospital construction obligations and is well- capitalized for its expected future growth.
Experts estimate that the combined business, with a market share of 33.4%, will be the clear leader on the Georgian insurance market, with a substantial increase in its retail client base of approximately 220,000 clients to a combined total of 420,000 retail clients.
Devi Khichinashvili, the President of the Georgian Insurance Association, a union for representatives of the Georgian insurance industry, said that the move places Aldagi BCI in a position to attract additional financial resources from investors.
“Through this acquisition, Aldagi BCI creates the fundamental background [needed] for listing on foreign stock exchanges,” Khichinashvili said. “[Eventually] Imedi L will fully merge with Aldagi BCI and that will be a serious announcement for attracting investments.”
By the end of 2012, the combined Aldagi BCI and Imedi L healthcare businesses are expected to own hospitals with a total of nearly 1,200 beds, an increase of approximately 400 beds during 2012.
“This acquisition is in line with our strategy to increase our market share on the Georgian insurance market and to enlarge our health insurance and healthcare businesses to achieve greater synergies, Gamkrelidze noted. Moreover, he says that they expect to deliver significant cost synergies, almost double the company’s share of the insurance market in Georgia, and achieve a substantial enlargement of their healthcare business in both western and eastern Georgia as a result of the purchase of Imedi L.
According to the most recent market data published by the National Bank of Georgia, as of September 30, 2011, Aldagi BCI had a market share of 17.1 % on the Georgian insurance market and Gross Written Premiums were 45.0 million lari in the first nine-months of 2011, while Imedi L had a market share of 16.3% and Gross Written Premiums were 42.8 million lari.
Irakli Gilauri, Chief Executive Officer of Bank of Georgia was positive and commented that the combined business puts them in great shape to achieve their strategic aim of the insurance and healthcare business becoming 10% of the Bank’s earnings over the next few years.
By Tamar Khurtsia