Private Equity Firm CVC Nears Deal to Buy Insurance Arm of National Bank of Greece

CVC Capital Partners is nearing a deal to acquire National Bank of Greece SA’s insurance business after a years-long search for a buyer, people familiar with the matter said.

The private equity firm could announce an agreement as soon as this week to buy a majority stake in Ethniki Insurance, according to the people, who asked not to be identified because the talks are private.

A disposal would help National Bank of Greece replenish its capital buffers as it continues to clean up bad loans on its balance sheet. It’s also delivering on a pledge to the European Commission after the financial crisis that it would try to offload the business, which offers both life and non-life policies.

Representatives for National Bank and CVC declined to comment.

This year has seen a flurry of deals in the insurance industry, driven by European giants seeking to divest peripheral businesses to streamline their operations. CVC, one of the private equity firms with the most experience in financial services deals, has invested in lenders, insurers and payments firms. It already owns French insurance broker April as well as specialty P&C insurer Fidelis.

National Bank of Greece is also selling a 6.1 billion-euro ($7.2 billion) portfolio of bad debt as it seeks to cut its non-performing loan ratio by more than half. Pacific Investment Management Co. and a consortium backed by Bain Capital are among preliminary bidders for the assets, people with knowledge of the matter have said. The loans are a legacy of the country’s decade-long debt crisis, which saw economic output fall by around 25% and unemployment reach as high as 30%.

–With assistance from Paul Tugwell.

Topics Mergers & Acquisitions