A new collective agreement at German state-owned insurer Provinzial NordWest Konzern has removed a key barrier to the group's merger with peer Provinzial Rheinland Versicherung AG, Handelsblatt reported Jan. 19, citing sources familiar with the talks.
Insiders told Handelsblatt that the collective agreement for the roughly 3,000 Provinzial NordWest employees was reached in the middle of December 2019 and should be announced within the next week. This paves the way for the merger with Provinzial Rheinland which has been dragging on since September 2018.
Nevertheless, a future tie-up between the two insurance groups is still seen as a complex and time-consuming process, according to the report. This is the fifth attempt to merge the two companies, majority-owned by savings banks in the German state of North Rhine-Westphalia.
The savings banks are keen on combining the Provinzial Rheinland and NordWest businesses because a merged insurance entity will be better positioned to compete with the German cooperative bank sector's joint insurance group, R+V Allgemeine Versicherung AG.
A merger will propel the Provinzial groups among the 10 largest insurers in Germany.