To merge or not to merge

An investor that buys several companies operating on the same market is always faced with an important question: how to run them. Is it best to let the companies operate as a multibrand system or is it more efficient to merge them? This question came up when Wiener Staedtische took over the controlling interests in Omniasig insurance company. With the seven companies it came to hold on the Romanian market, the Austrian group is not operating as a single entity, and its representatives say they will go on as a multibrand structure and have no plans for a merger. Omniasig controls four companies: Omniasig Life (life insurance), Omniasig Addenda (health insurance), Omniasig AGI and Omniasig Asirag (general insurance), with the latter two being engaged in a merger by absorption process with the parent company. Besides Omniasig, which is run by Constantin Toma, Wiener Staedtische also owns Unita insurance company in Romania, which in its turn controls Agras that specialises in agricultural insurance. Dan Odobescu, the general manager of Unita says, “the multibrand system is a little more expensive in terms of administrative costs.” To address this issue, a board to oversee all the companies in the group would be created in time. The Unita manager added this board would operate when “Vienna decides it.” Wiener Staedtische uses the multibrand structure on all the markets it operates on. ZF