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Vardia Insurance Group to divest Swedish assets, purchase former Norwegian unit

GjensidigeForsikring ASA will buy Vardia Insurance Group ASA's Swedish insurance portfoliofor 200 million Swedish kronor as Vardia works to rebuild its solvencyposition.

Gjensidige Forsikring will also acquire from VardiaHolding AB, a company owned by employees of Vardia Försäkring. The Swedishportfolio has been handled through a distribution agreement by VardiaFörsäkring since Vardia Insurance Group's restructuring in 2015.

The sale includes all Swedish insurance policies written byVardia Insurance until deal completion, the technical reserves linked to theassets and all related customer reinsurance receivables and liabilities. Dealcompletion is expected on or around July 1, pending the receipt of requiredregulatory approvals and fulfillment of certain pre-conditions.

Gjensidige noted that gross premiums written for the Swedishportfolio that it is acquiring were about 650 million Swedish kronor in 2015,and it added that Vardia Försäkring also distributes for another risk carrier apremium volume of about 40 million kronor.

In a separate transaction, Vardia Insurance agreed torepurchase former unit Vardia Norge AS and the latter's distributionbusinesses, Vardia ForsikringAS, Vardia Eksterne KanalerAS, Vardia Skadeoppgjør AS and Vardia Fordel AS, which itsold to currentmanagement in 2015.

Vardia Norge employs a staff of 250 as of Dec. 31, 2015. Followingthe acquisition, the operations of the entities will be integrated into VardiaInsurance's business.

Vardia noted that it became clear March 20 that its capitallevels were inadequate under regulatory requirements as of Feb. 29. TheNorwegian FSA then granted the company a time-limited dispensation to meet thecapital requirements, for which Vardia will apply for an extension until theclosing of the transactions.

Once the transactions close, Vardia said it expects to havea solvency ratio above its "comfort target level" of 130%.

Carnegie Investment Bank and ABG Sundal Collier serve asfinancial advisers to Vardia Insurance in connection with the transactions.Advokatfirmaet Wiersholm serves as legal adviser.

Arctic Securities, EY, Mannheimer Swartling and Thommessenare serving as advisers for Gjensidige Forsikring.

As of April 28, US$1was equivalent to 8.10 Swedish kronor.