OREANDA-NEWS. January 25, 2013. SORAINEN has been advising ERGO, one of the largest insurance groups in Europe, on a cross-border merger of its subsidiaries operating in Estonia, Latvia and Lithuania into a European Company (“Societas Europaea”) registered in Estonia with branches in Latvia and Lithuania under the new business name ERGO Insurance SE (SE), reported the press-centre of SORAINEN.

On 27 November 2012, the Estonian Financial Supervision Authority authorised the cross-border merger of ERGO Baltic non-life insurance companies. The merger was registered with the Estonian Commercial Register on 2 January 2013.

The purpose of the merger is to simplify and harmonize the legal structure of the merging companies and their group with existing pan-Baltic organisational structure enabling optimisation of corporate governance, cost savings on administration, management and intra-group transactions, more efficient use of invested capital and improved efficiency of business activities through unified internal control procedures. The merger is likely to contribute considerably to achieving these aims.

„The merger of ERGO insurance companies in the Baltic States is a part of the consistent implementation of the ERGO Group strategy in the Baltic Region,” says Dr. Bagdonavicius, Chairman of the Management Board of the ERGO Insurance Group in the Baltic States. “Moreover, we will continue providing non-life insurance service as a uniform and strong company capable of mobilising the experience from all three Baltic States for the benefit of our customers and partners. This merger will not only reinforce ERGO’s position in the Baltic Region, but will also improve its competitive advantage.”

With ERGO pan-Baltic companies employing over 1,300 personnel, the transaction required employee engagement in establishing the SE. This required an employees’ general meeting to elect a special negotiation body to decide on whether or not to conduct negotiations with the merging companies to agree on the rules for involving employees in the SE or whether to rely on the rules of information and consultation applicable in the Baltics.

This is the fourth insurance sector cross-border merger transaction on which SORAINEN has advised throughout within the last five years, earlier similar transactions concerning If, Seesam and AON. Additionally, during the same period we advised on the pan-Baltic cross-border mergers of Heidelberg, Elektroskandia and Siemens, clearly making SORAINEN the first choice among legal advisers on pan-Baltic corporate restructuring transactions.

In addition to the cross-border merger under Council Regulation (EC) No. 2157/2001 of 8 October 2001 on the Statute for a European company (SE), the assignment involved extensive pre-merger corporate restructuring (transformations, share transfers and establishing foreign branches of insurance undertakings), resolving legalities with policyholders with risks abroad, negotiations with Financial Supervisory Authorities as well as managing the project from the legal perspective. The client was advised by the SORAINEN regional team led by partner Karin Madisson, and including (from Estonia) senior associate Risto Agur with associates Inga Murula (acting as pan-Baltic project manager) and Marika Oksaar, (from Latvia) partner Eva Berlaus with associates Zanda Frisfelde and Santa Selga, and (from Lithuania) partners Tomas Kontautas and Algirdas Peksys with senior associate Tomas Talutis and associate Agniete Zukauskaite.