Commission clears way for Anglo to take Quinn stake
THE European Commission yesterday cleared the way for Anglo Irish Bank to take a 49pc stake in Quinn Insurance, ruling the deal did not pose state aid issues since Anglo was merely "acting as a private creditor".
The development marks one of the final hurdles in Quinn Insurance's protracted sale, which is now expected to be completed by the end of the month.
Anglo will take a 49pc stake in the 'new' Quinn Insurance, with US insurer Liberty Mutual owning the remainder. The deal had to go to the EU because of Anglo's state-owned status.
In a statement, Europe's competition commission yesterday said that Anglo was "merely a creditor" to the Quinn Group and was acting in that regard by trading its debts for a stake in the insurance company without contributing any cash.
The commission also deemed that the part of Quinn Insurance being partially taken over by Anglo was "viable" since it included an Irish general insurance business which had been "historically profitable" and would also "benefit from Liberty Mutual's expertise".
"The administrators have worked out a plan that provides for a viable future for the healthy parts, ensures an adequate burden sharing by the shareholders and limits the distortions of competition," competition commissioner Joaquin Almunia said.
The other parts of the business, including commercial and private policies in the UK, will be left under the control of court-appointed administrators and will be largely run down.
"Overall, the restructuring measures result in a substantial reduction of the market presence of Quinn Insurance Limited," the competition commission noted.