OREANDA-NEWS. October 21, 2014. Following a five-month investigation, the Competition Council of Lithuania gave the green light to the acquisition of up to 100% of shares in Lietuvos draudimas by Polish insurance company PZU. Valued at LTL 1.2 billion (approx EUR 347 million), this transaction, in which PZU takes over the Lithuanian, Latvian, Estonian and Polish business of RSA Insurance Group, the operator of Lietuvos draudimas, is the largest transaction in the Baltics this year. For the purpose of the transaction, the value of Lietuvos draudimas alone was estimated at LTL 620 million (approx EUR 180 million).

During the investigation, the Competition Council stated that competition might be limited because the merging insurance companies held large market shares in the insurance market for land vehicles other than railway vehicles (KASKO) and in the property insurance market. Taking into account the opinion expressed by the Competition Council, PZU entered into commitments to transfer its business related to KASKO and the property insurance activities of PZU Lietuva to a buyer already operating in the market or seeking to enter the market. For the first time in the history of Lithuanian competition law, a trustee has been appointed to monitor implementation of the commitments. PricewaterhouseCoopers will monitor and assess PZU’s compliance with the terms of concentration and obligations established by the Competition Council.

The decision of the Competition Council to allow the concentration with the commitment to sell part of the business to reduce the post-transaction market share of the parties is the first structural commitment of this scale in the history of Lithuanian competition law and corresponds to the latest practice of the European Commission in the area of concentration.

SORAINEN provided comprehensive legal assistance to PZU both in acquiring Baltic insurers (Lietuvos draudimas (Lithuania), Balta (Latvia) and Codan Forsikring (Estonia)) from RSA Insurance Group and in drafting a notice of concentration to the Competition Council, as well as in carrying out all transaction-related tasks to ensure successful closure of the deal.

The SORAINEN team consisted of competition law experts – specialist counsel Paulius Koverovas and associate Giedre Adomaviciute, insurance law experts – partner Tomas Kontautas, associates Agne Sovaite and Arturas Asakavicius, and mergers and acquisitions law experts – senior associate Sergej Butov and associate Evaldas Dudonis.