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Poland's giant state-controlled insurer PZU is honing in on an acquisition target after years of looking, with its CEO announcing on May 13 the company hopes to buy a stake in Croatia's Osiguranje. The deal would provide PZU with a stepping stone into the rest of the Western Balkans, though Andrzej Klesyk admitted PZU might struggle to secure a majority in the insurer from the Croatian government.

Travelling as part of a delegation headed by Polish President Bronislaw Komorowski to Zagreb, Klesyk said PZU - which has been on the lookout for acquisition targets for years as it struggles to find growth opportunities at home - hopes to buy a majority stake in Osiguranje, which controls a third of the local insurance market, according to Reuters.

However, while Komorowski will sign off on cooperation between Poland's foreign investment agency and that of the EU member-in-waiting, Klesyk said he does not yet know if PZU will be able to convince Zagreb to sell a majority stake out of the 80% it holds in Osiguranje. "We are most interested in the role of the main shareholder with a majority stake," Klesyk said. "We don't know yet whether this will be possible."

PZU has been looking for takeovers in CEE in recent years because its ability to grow at home is limited. Despite its large cash pile, it has little to show for its efforts, with hardly any large insurance assets having been put up for sale. Klesyk said he hoped Croatia would be a stepping stone to a wider presence in the region.

"There are many similarities between the Croatian and Polish markets," Klesyk said at his press conference, according to tportal.hr, before adding that it's the growth potential in the Adriatic state that's key for PZU. "Croatia is a growing market in which there is still plenty of room to reach the level of the European Union."

Coming from a relatively new EU member state, PZU could help Osiguranje adapt to life in the bloc, he offered.

There will likely be other suitors for Osiguranje, however. Local competitors for the planned privatisation of Osiguranje, according to Croatian media, are Istrian tourism and tobacco group Rovinj Adris and Slovenian insurer Triglav.

The latter could be a target for PZU itself, following the Slovenian government's economic reform plan unveiled last week for wide-scale privatisation as part of efforts to avoid needing an international bailout. While Klesyk sarcastically remarked that Slovenia has been talking about selling off a stake in Triglav for over 18 months, he also admitted the company could be the next logical step in any regional strategy. "Of course, anyone who buys Croatia Osiguranje will be interested in Triglav," he commented. "It makes sense. Then they will look to the south."

The PZU chief reiterated that "east of Berlin and west of Moscow" is the focus of the company's slow-motion expansion drive, reports Hina. However, none of the "players" on those markets will want to give up their stakes lightly, and privatisation in many has already been completed, he complained.