PZAKY Powszechny Zaklad Ubezpieczen SA (PK)

By Martin M. Sobczyk

WARSAW--Poland's largest insurance company PZU SA (PZU.WA) and a Polish government vehicle have agreed to buy a combined 32.8% stake in the country's second-largest bank by assets from Italy's UniCredit SpA (UCG.MI), PZU said on Thursday.

PZU will buy 20% of Bank Pekao SA (PEO.WA) while the fund PFR will buy 12.8% for 123 zlotys a share, bringing the total price for the controlling stake to 10.59 billion zlotys ($2.57 billion). Pekao on Wednesday closed at PLN120.50 a share.

PZU is controlled by the Polish government, its single-largest shareholder. PFR is a government entity created to help large Polish companies expand.

The transaction will reduce foreign ownership in the Polish banking sector. About 60% of it is now in the hands of foreign banks, mostly from the eurozone.

The sale will help the Italian lender shore up its finances as it prepares a new strategic plan to be announced in December. UniCredit said Thursday that it will sell its remaining 7.3% in Pekao on the stock market. The sale will boost UniCredit's Cer1 ratio by 55 basis points, it said.

-Write to Martin M. Sobczyk at martin.sobczyk@wsj.com

(END) Dow Jones Newswires

December 08, 2016 02:59 ET (07:59 GMT)

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