Exista acquires insurance company VÍS Skip to content

Exista acquires insurance company VÍS

In its main story on its front page today, Morgunbladid reports that the investment company Exista has acquired the entire share capital of the insurance company VÍS.

The brothers Ágúst and Lýdur Gudmundsson are Exista’s largest shareholders with 47.4 per cent.

The purchase price is ISK 65 billion, and the owners of VÍS will receive 18.5 per cent of Exista as part of the transaction. VÍS and Exista will be merged under the name of Exista. The merged company is valued at ISK 288 billion.

Kaupthing, which owned 24 per cent of VÍS prior to the merger, will temporarily raise its stake in Exista from 19.2 per cent to 20.9 per cent. Exista is Kaupthing’s largest shareholder with 21.1 per cent. The cross ownership of many Icelandic companies has been criticized as giving rise to conflict of interest, most recently in reports issued by several well-known international banks earlier this year. In response to that criticism, Kaupthing has stated that it intends to divest itself of its shares in Exista.

“This transaction will create one of the most powerful financial services company in Iceland, after Kaupthing,” said Lýdur Gudmundsson, executive chairman of Exista to Morgunbladid.

According to the Icelandic Broadcasting Service, RÚV, in addition to Kaupthing Exista’s main holdings include 44 per cent of Iceland Telecom, privatized in a controversial transaction in 2005, approximately 25 per cent of food services company Bakkavör and Iceland’s largest leasing company, Lýsing.

RÚV reports the former minister and governor of the Central Bank of Iceland, Finnur Ingólfsson, a member of the Progressive party, will step down as the CEO of VÍS and become executive chairman.

According to RÚV, Exista intends to list on the Icelandic Stock Exchange in September.

Sigurjón Thórdarson, Member of Parliament for the Liberals, writes about the transaction on his website.

“There is no doubt why the former vice-chairman of the Progressive Party, Finnur Ingólfsson, resigned as governor of the Central Bank and became CEO of an insurance company.

When the Progressive and Independence parties handed out the state banks Landsbanki and Búnadarbanki to the parties’ benefactors, Landsbanki’s 50 per cent stake in VÍS was ripped out of the bank and given to people closely connected to the Progressive Party.

The whole privatization process was very controversial and led, among other things, to the resignation of Steingrímur Ari Arason [Independence Party] from the Committee for Privatization.

It is notable that now, three years later, those who received half of VÍS for a pittance are selling their shares for a tremendous profit .. The stake they bought at ISK 6.8 billion is now valued at 31.8 billion.”

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