Allianz to buy Turkish insurer for €684m Allianz has boosted its position in Turkey through a €684m deal to buy non-life and pensions businesses from Yapi Kredi bank in a move that marks the consolidation of the country's developing insurance sector. The German group said the deal would make it the largest insurer in Turkey by premiums. Allianz made clear last year it wanted to grow by finding a partner in Turkey, a market it says is one of the world's fastest-growing for insurance. The transaction follows a €1.5bn deal last year in which Eon, the German utility, took a half share in Enerjisa, a Turkish power company, as part of its own strategy to expand in emerging markets to make up for low growth in western Europe. It also represents a vote of confidence in the Turkish economy, which officials say grew by about 2.5 per cent last year - well below the levels of 2010-11, but the country has a young population, promising further growth in the years ahead. Yapi Kredi will sell its 93.9 per cent stake in Yapi Kredi Sigorta, its non-life insurance subsidiary, to Allianz. In a second step, Allianz will launch a tender offer for the remaining 6.1 per cent of shares in Yapi Kredi Sigorta, which is listed in Istanbul. Allianz will also buy Yapi Kredi Emeklilik, a life and pensions business, with Yapi Kredi keeping a 20 per cent stake. Allianz told analysts last year that its life and pensions operations in Turkey were profitable but sub-scale. The €684m deal value excludes the €80m Yapi Kredi will pay Allianz to keep its stake in the life and pensions unit. The agreement with Yapi Kredi also includes a 15-year deal for Allianz to sell insurance through Yapi Kredi, which has 6.5m customers and is Turkey's fourth-largest bank by assets. Allianz has long been eyeing growth potential in Turkey, where in 2008 it expanded by buying assets from the Koc conglomerate. Revenues in the market have been growing at double-digit rates for the past five years, Allianz said on Wednesday, although as a percentage of gross domestic product, spending on premiums is only half the level in central and eastern Europe, and one-sixth of the level in western Europe's more mature markets. The pensions sector is also expected to grow because of incentives introduced by recent government reforms. The combination with Yapi Kredi, which is 82 per cent owned by a joint venture between Koc and Italian lender UniCredit, would create Turkey's largest non-life insurer and the third-largest life assurer by premiums, Allianz said, as well as the second-largest pensions provider by assets under management. Oliver Bäte, a member of Allianz's management board, said the deal "fits perfectly into Allianz's strategy to use bolt-on acquisitions to strengthen its position in growth markets." In filings with the Turkish stock exchange, Yapi Kredi said the transaction would need to be approved by the country's competition board and other domestic authorities. Allianz shares were down almost 1 per cent at €107.30 in early Frankfurt trading. Shares in Yapi Kredi Sigorta were down 9.5 per cent in late morning trading after having previously registered large gains in recent weeks in anticipation of a sale.