PZU SA and Bank Pekao SA have signed a document preliminarily outlining the terms of cooperation between the two companies regarding a potential transaction to reorganize their capital group and create a new banking and insurance group (so-called term sheet). The signing of the document is another step in preparing the transaction, strengthening cooperation between the parties. It has been agreed that the companies will establish a Steering Committee and joint working groups to carry out work on the project.

According to the memorandum of understanding signed on June 2, PZU and Pekao aim to reorganize and increase the efficiency of the capital group by releasing excess capital of up to PLN 20 billion. The first stage leading to the potential transaction involves the division of PZU SA by separating a holding company and a 100%-owned subsidiary conducting operational activity in the field of property and other personal insurance. In the second stage, the PZU holding company will be merged with Bank Pekao as the acquiring entity. The final decision on the merger will be made by the shareholders of both companies.

The term sheet indicates that PZU has already undertaken and will continue activities aimed at carrying out the division and creating the holding structure. The document defines the principles of cooperation between the two parties in pursuing the planned transaction, tasks to be completed, and the various stages of work. To ensure close coordination of activities, the parties will establish a Steering Committee composed of the CEOs of PZU and Pekao and one management board member from each company. The committee will meet regularly and make decisions unanimously. It will also define the project's timeline and key milestones. The parties will jointly hire an external project manager and create working groups—both joint and individual—for specific areas related to the project’s implementation.

The term sheet also states that the parties will determine the rules for establishing the share exchange ratio of PZU shares for Bank Pekao shares, which would be issued to PZU shareholders as part of the merger. The exchange ratio will be determined taking into account interests of all shareholders, including minority shareholders. The valuations of PZU and Bank Pekao will be carried out by reputable entities selected respectively by the insurer and the bank.

“We want to carry out an absolutely unique transaction in terms of scale, complexity, and significance. Nothing like this has happened on our financial market. We're working to release PLN 15 to 20 billion in capital for PZU and Pekao shareholders and for the Polish economy. This motivates us and the bank, involves many employees, the best advisors, and requires coordinated action. Signing the term sheet, which organizes the work and outlines the path forward, is a sign that we are taking concrete steps and moving toward our goal,” said Andrzej Klesyk, acting CEO of PZU.

“The work on creating a new financial group, important for the Polish economy, is entering the next stage. We have a clear roadmap, we are forming expert working groups, and we are shifting into a higher gear in our cooperation. Many challenges still lie ahead, but thanks to good organization and our cooperation with PZU, we are on the right path to completing this ambitious project,” said Cezary Stypułkowski, CEO of Bank Pekao.

The term sheet confirms that the parties intend to complete the potential transaction by June 30, 2026. PZU and Bank Pekao emphasize that carrying out the transaction is subject to a number of factors beyond their control, including the enactment of appropriate legislative changes (including amendments to four laws: on the management of state property, banking law, insurance and reinsurance activity, and insurance distribution), agreement and conclusion of relevant transaction documentation (within 120 days from the entry into force of the necessary legislative changes), obtaining the consent of the Council of Ministers, and a range of regulatory approvals, particularly from the Polish Financial Supervision Authority (KNF).