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. Last Updated: 07/27/2016

Generali Buys Stake in Ingosstrakh

PRAGUE -- Europe's third-largest insurer, Italy's Generali, has acquired an indirect stake in insurer Ingosstrakh to gain a foothold in the fast-growing market, Generali's partner in the venture said Wednesday.

Generali paid an undisclosed price for a 49 percent stake in PPF Beta, an investment vehicle managed by Czech-owned private equity group PPF Investments, which owns 38.46 percent of Ingosstrakh, the second-largest Russian insurance company.

PPF Investments announced the agreement after revealing Generali's intention to take a stake in PPF Beta in mid-October.

Generali has been seeking to expand into Russia after setting its sights on becoming the sector leader in Central and Eastern Europe by buying a stake in Czech insurer Ceska Pojistovna in July.

The deal with PPF Investments means that Generali will join battle with Basic Element, an industrial holding company controlled by billionaire Oleg Deripaska and the majority shareholder of Ingosstrakh.

PPF Investments and Basic Element have already locked horns over PPF's influence in the firm. This dispute follows a general meeting of Ingosstrakh shareholders on Oct. 8 when Basic Element voted to quadruple the firm's registered capital to 10 billion rubles through a closed issue of shares.

A Russian court has issued an injunction blocking the capital hike, which threatens to dilute PPF's stake in the insurance company to less than 10 percent.