FAS approved the sale of IC ALROSA

The Federal Antimonopoly Service (FAS) approved the application of the SOGAZ company to acquire 99.7% of the insurer of the largest diamond miner, ALROSA. The competing buyer, AlfaStrakhovanie, has so far made less progress in realizing its intentions regarding the transaction. At stake is a three-year contract for insurance of ALROSA risks with premiums of 1.3 billion rubles.

Photo: Yuri Martyanov, Kommersant / buy photo

As follows from the FAS message, the antimonopoly agency approved SOGAZ's application to acquire the insurer ALROSA. The size of the purchased share is 99.74%. ALROSA's plans to get rid of its subsidiary insurance company became known three years ago. In the Agreement on the socio-economic development of the Republic of Sakha (Yakutia) signed then with Yakutia, it was stated that OJSC IC ALROSA would be reorganized by merging with OJSC RSK Sterkh, which had the status of a republican insurer (50% of the shares belonged to the Ministry of Property of Yakutia). But the deal never took place. The next time ALROSA recalled its intention to sell the insurer a year ago during the preparation of the IPO, when a program for the sale of non-core assets of the diamond mining company was announced.

This time, the auction for the sale of the insurer is scheduled for November 14. The initial price is set at 576.547 million rubles. The auction step is 1.453 million rubles, subsequent ones - 2 million rubles. If there is no bargaining, the insurer will go to a new buyer at a favorable price, analysts say. According to the Central Bank, the annual fees of the insurer ALROSA amounted to 721.6 million rubles. (106th place in the market), the amount of net profit for this period is 43.7 million rubles. “The multiplier for fees as an assessment of the insurer depends on the agreements to preserve the business with the new owner,” says Pavel Samiev, deputy head of the Expert RA rating agency. “If there is such an agreement, the company’s assessment may be 1 to the annual fees. Considering that the diamond mining ALROSA is controlled by the state, guarantees to preserve the business are more difficult to obtain, so the multiplier may be slightly lower than 1."

SOGAZ's interest in the potential transaction is more than just acquiring a small insurer. According to Kommersant, we are talking about a serious contract for insurance services for ALROSA. As a source familiar with the situation told Kommersant, at the end of last year the diamond mining company held a tender to insure its risks. Eight lots were put up for competition - property insurance, cargo insurance, employee health insurance, etc., totaling 1.3 billion rubles. until the end of 2017. Seven insurers took part in the tender: Ingosstrakh, VSK, Capital Insurance, and SOGAZ was among the participants. The winner was SK ALROSA. If SOGAZ becomes the buyer at the end of the auction, it will be able to repeat the success of the purchase of the insurer Transneft. The purchase of the insurance subsidiary of Transneft took place in September last year; currently, the risks of the oil company are under the protection of SOGAZ (collections of the purchased subsidiary in the first half of 2014 amounted to 6.4 billion rubles).

SOGAZ confirmed to Kommersant that an application had been submitted to acquire IC ALROSA, but declined to comment further. ALROSA financial director Igor Kulichik told Kommersant: “We are not selling a license, but the entire business of the insurer. All contracts previously concluded by the company remain with the company.”

However, SOGAZ is not the only contender for the purchase of SK ALROSA. As a source close to parent ALROSA told Kommersant, three companies initially showed interest in purchasing the insurer: VTB Insurance, SOGAZ and AlfaStrakhovanie. Currently, SOGAZ and AlfaStrakhovanie are talking about their readiness to participate in the deal. Moreover, according to Kommersant’s interlocutor, AlfaStrakhovanie is the most active among the two contenders. He also has extensive experience in M&A transactions: since 2005, the company has acquired six corporate insurers, but, taking into account the approval received by SOGAZ from the FAS, Alfa is slightly behind its competitor in terms of the degree to which its intentions are realized. The head of the company could not be reached for comment last night.

Tatiana Grishina, Elena Kiseleva

Insurers went for diamonds