Poland Considers Alternative Plan Amid Delays in PZU-Pekao Insurance Merger
Delays and Alternative Strategies in the PZU-Pekao Merger
WARSAW, Sept 24 (Reuters) - Poland is seeking an alternative way to reorganise its biggest insurer PZU as legislative changes required to implement the initial plan face the risk of presidential vetoes, the state assets minister said.
Background of the PZU-Pekao Merger
PZU, which has stakes in Pekao SA and Alior Bank of 20% and 31.9% respectively, said last year it planned to merge with Pekao, one of Poland's largest banks.
Original Merger Structure
Under the plan, PZU, which has more clients than any other Polish insurer, would be split into a holding company and a wholly-owned unit to run its operational insurance activity.
Planned Holding Company and Merger Timeline
The holding company would then be merged with Pekao. However, the deal, initially expected to be completed by mid-2026, has been delayed because legal changes would be necessary under the original merger plan.
Political and Legislative Challenges
Changing law has been made harder by political gridlock in Poland between the government, which is pursuing European Union-aligned policies, and President Karol Nawrocki, who represents the main opposition party, the socially conservative and nationalist Law and Justice party, or PiS.
Exploring Alternative Scenarios
State Assets Minister Wojciech Balczun told reporters on Wednesday an alternative merger scenario, which would require fewer legal changes while maintaining the government's holdings or rights of companies within the holding, was possible.
Potential for a New Holding Structure
"There are other ideas with a greater chance of success such as a holding structure that separates the holding company from banking and insurance operations," Balczun said.
(Reporting by Marek Strzelecki and Anna Koper; editing by Barbara Lewis)
