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Russia's VTB Bank to sell insurance unit to Sogaz

VTB Bank (PJSC) agreed to sell 100% of VTB Insurance Ltd. to JSC Sogaz, in a deal that would create the largest insurer in Russia.

On top of an undisclosed cash consideration, the Russian government-controlled bank will get a 10% stake in the merged entity, which will operate under Sogaz's brand. The deal is expected to close in the third quarter following necessary regulatory approvals.

The merged entity will cover mandatory health, bank and retail insurance, as well as corporate and private health insurance.

The insurance businesses of both companies have a total accrued premium of about 280 billion Russian rubles for 2017 under International Financial Reporting Standards, with total assets amounting to about 550 billion rubles, according to the Russian lender.

As of May 24, US$1 was equivalent to 61.53 Russian rubles.