Argentina's Galeno To Pay $59.4 Million For Accident Insurer Consolidar

Argentine health insurer Galeno Argentina SA has signed an agreement to buy workplace accident insurance company Consolidar Aseguradora de Riesgos de Trabajo SA in a deal valued at $59.4 million, according to one of the parties involved in the deal.

In a filing with the Buenos Aires Stock Exchange on Thursday, banking group BBVA Banco Frances SA (FRAN.BA, BFR) said its share of the proceeds from the sale is equivalent to its 12.5% equity stake in Consolidar.

The deal is subject to standard closing procedures, including authorization by Argentina's insurance regulator, Banco Frances said.

Galeno's diversificaton into workplace accident insurance, which is mandatory for most employers, comes as the prepaid health insurance industry faces a big increase in costs and government oversight.

In May, Congress passed sweeping health-care legislation that greatly expands the federal government's oversight of health-insurance companies in a move that critics say might bankrupt the private medical system.

The most onerous provisions would require health insurers to accept clients with pre-existing medical conditions, force companies to provide full care from the first day of coverage, and freeze premiums for clients over the age of 65 who have been insured for at least 10 years.

The government will also vet premium increases and set the minimum fees insurers must pay to medical-care providers.

Shares of Banco Frances, which is majority owned by Spain's Banco Bilbao Vizcaya Argentaria SA (BBVA), were recently trading up 0.9% lower at $5.53 in New York.

-By Ken Parks, Dow Jones Newswires; 54-11-4103-6740, ken.parks@dowjones.com

BBVA Bilbao Vizcaya Arge... (NYSE:BBVA)
Historical Stock Chart
From May 2024 to Jun 2024