Polish Gov’t. May Impose New Limit on Eureko, PZU Deal

December 6, 2001

Poland’s newly installed Treasury Minister, Wieslaw Kaczmarek, has questioned the accord reached between the previous government and Eureko, the European consortium that is seeking to acquire a stake in Poland’s largest insurer Powszechny Zalad Ubiezpieczen (PZU).

He indicated that the new government wasn’t willing to see Eureko raise its current 30 percent holding to 51 percent, giving it majority control over PZU. The accord, which was concluded between the outgoing Solidarity led government and Eureko, has been strongly opposed by the new Democratic Left Alliance, which recently took formed a new government.

After lengthy, and at times acrimonious, negotiations the two parties seemed to have overcome most of the obstacles to the acquisition, but now it’s unclear whether Eureko will accept a 50/50 deal, which could deprive it of the control it deems necessary to streamline PZU’s operations.

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