On 7 March 2016, after evaluating reports prepared by PricewaterhouseCoopers, the Lithuanian Competition Council (“Council”) confirmed that Polish insurance company PZU, which acquired 100 % of the shares in Lietuvos draudimas, had timely and properly fulfilled the merger conditions and obligations set by the Council on 9 March, 2014 when issuing a clearance decision for acquisition of Lietuvos draudimas shares. The acquisition was approved subject to a condition to divest part of the business in order to lower market share in relevant markets.
In meeting the obligations imposed by the Council, in less than a year PZU divested PZU Lietuva’s business in Estonia and Latvia and sold shares in PZU Lietuva to leading Norwegian insurance company Gjensidige Forsikring. During the entire remedial implementation period, PZU and PricewaterhouseCoopers, which was instructed as trustee, provided the Council with detailed reports on the implementation process.
The green light for the acquisition of up to 100% of the shares in Lietuvos draudimas was given to Polish insurance company PZU after a five-month investigation by the Council, on 9 October 2014. This transaction, in which PZU acquired the Lithuanian, Latvian, Estonian and Polish business of RSA Insurance Group, the previous operator of Lietuvos draudimas, was valued at EUR 360 million: the largest transaction in the Baltics in 2014. For the purpose of the transaction, the value of Lietuvos draudimas alone was estimated at EUR 180 million.
The Council decision to approve the acquisition subject to the condition of divesting part of the business to alleviate concerns raised by the Council as regards the post-transaction market share was the first example of structural remedies of this scale in the history of Lithuanian competition law and corresponded to the latest merger practice of the European Commission.
SORAINEN provided comprehensive legal assistance to PZU in acquiring Baltic insurers Lietuvos draudimas (Lithuania), Balta (Latvia) and Codan Forsikring (Estonia) from RSA Insurance Group, notifying the acquisition to the Council, separating PZU Group’s operations in Latvia and Estonia and transferring shares in PZU Lietuva to Norwegian insurance company Gjensidige Forsikring.
The SORAINEN team consisted of competition law experts, namely specialist counsel Paulius Koverovas and associate Giedrė Adomavičiūtė, insurance law experts, namely partner Tomas Kontautas, senior associate Agnė Sovaitė and associate Artūras Asakavičius, plus mergers and acquisitions law experts: partner Sergej Butov and senior associate Evaldas Dūdonis.