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German insurance giant Allianz said Wednesday it has agreed to buy Turkish property and casualty insurer Yapi Kredi Sigorta in a bid to become the biggest insurance group in Turkey.
Allianz said in a statement it will acquire a 93.9-percent stake in Yapi Kredi Sigorta for 684 million euros ($879 million).
The acquisition is part of a long-term cooperation agreement with Turkey's fourth-biggest private bank Yapi Kredi, the German group explained.
The deal will also cover the life and pension subsidiary Yapi Kredi Emeklikik.
Yapi Kredi Sigorta is the fifth largest property and casualty insurance company in Turkey with total premiums of 531 million euros and Yapi Kredi Emeklilik holds a top four position in life insurance with premiums of 90 million euros, the statement said.
"The combination of Allianz Turkey with the Yapi Kredi insurance operations will create the number one non-life insurer, the number two pensions provider and the number three life insurer in Turkey," Allianz said.
"Turkey is one of the fastest growing insurance markets worldwide, supported by a robust economic outlook and a large, young population of 75 million people," said Allianz board member Oliver Baete.
"The transaction with Yapi Kredi is a unique opportunity to move into a market-leading position in one of Europe's key growth markets which is also an important bridge between Europe and Middle East and Central Asia," Baete said.
Under the terms of the deal, Allianz will make a mandatory tender offer for the remaining 6.1 percent of Yapi Kredi Sigorta that is listed on the Istanbul Stock Exchange.
Yapi Kredi will retain a 20-percent stake in Yapi Kredi Emeklilik, Allianz added.