How an Insurance Company Bid in Greece Can Become a Weapon for the Chinese in Europe

It is no secret that the Chinese see Greece as a country that could help them get their foot (and say) in the European Union. In GreekReporter’s recent documentary Athens Chinatown, it is the Cosco managing director in Greece who says the mediterranean country offers a strategic location and it was this factor that attracted Cosco to take over the Greek port of Piraeus. Furthermore, the editor of China-Greece times also states that the Chinese “see Greece as the gate to Europe.”

The past few years, silently, China has looked into many Greek investments. After acquiring the Greek Port of Piraeus, now three Chinese companies are bidding for Greece’s biggest private insurer, Ethniki Asfalistiki. However what looks like a simple bidding, could possibly be of great importance to the future of Greece.

Established in 1891, Ethini Asfalistiki has invaluable contribution to the Greek economy for over a century. It is the largest insurance company in the country with total premiums of over 440 million euros and 18% market share, while it is in cooperation with the banking network for the sale of bank assurance products, provides access to a broad distribution network of about 500 offices. The estimated earnings for 2016 are 52 million euros.

Ethniki Asfalistiki is also a sister company of Greece’s Ethniki Bank (National Bank), one of Greece’s four systemic banks. Whoever gets this bid will most likely acquire the bank as well. At the same time, another Chinese group has shown interest for Piraeus Bank. If they manage to close that deal then two out of Greece’s four main banks will be controlled by the Chinese. Eventually they will be able to have an important say in the country’s economy, and maybe that’s what they are aiming for.

While the Chinese have done serious investments in Greece, this one, in combination with everything else they control can become a decisive factor on how much influence does Greece want the Chinese to have on the country’s future. Letting Ethniki Asfalistiki in the hands of China is probably allowing too much of their foothold in the Greek economy, which would mean a great political influence as well.

China of course would like to be able to control and play with Greece’s economy in order to advance their interests. But it is dangerous for Greece when the country’s future becomes another argument on a geostrategic dialogue between the big powers. A forced Grexit threat, for example, could definitely be on the table and be directed to the EU or the U.S.A..

The bidders of Ethniki and the “Greek-American solution”

There are three Chinese and one Greek-American group that want to acquire the Insurer. Fosun, Gongbao and Wintime are the three Chinese companies fighting for the Ethniki Asfalistiki stake. On the opposite side there is the Exin Group, made up by John Calamos and John Koudounis of Calamos Investments, insurance expert Matthew Fairfield, and Pavlos Kanellopoulos together with Nicholaos Adamantiades of AIG.

Calamos Investments CEO John Koudounis

In Exin Partners, the Greek element is critically present. The Insurance consortium is led by John Koudounis, a Greek American with 30 years of experience who took over in 2016 at the helm of Calamos Asset Management from the founder John Calamos. Calamos Asset Management is active in the investments field since 1977, and manages over $ 20 billion. John Koudounis, of Spartan descent, is the first college graduate in his family, from an Ivy League University, who did his first transaction on Wall Street just months after graduation – being the youngest investment banker that Merrill Lynch had ever hired. He was also the youngest CEO of any Wall Street firm when he was appointed (2010 for Mizuho Securities USA).

Kanellopoulos – Adamantiades are the partners in Athens, an established partnership which has led to the purchase of AIG Group with EXIN Partners, while Matt Fairfield, the only non-Greek partner, has 26 years of experience in the insurance market.

The Chinese Fosun has already a foot in the Greek market as its has stake on the Elliniko development and Follie-Follie. With Ethniki Asfalistiki Fosun becomes a big player in Greek economy. It also has control of Portugal’s Fidelidade, establishing a good stake in the European South.

According to The Insurance Insider, both Fosun and the Greek-American consortium made bids valuing the business at slightly more than 800 million euros. It is possible that only around 80 percent of equity will be sold.

The bid evaluation might last several weeks, but with Greece having to make major debt repayments in July, all parties want to close the deal as soon as possible.