Under the deal, Sava Re purchased 11.79% for EUR 15m, raising its combined holding to 60.47%, whereas SOD spent EUR 50m on the 39.21% stake; the two now own 99.68% of Slovenia's third largest insurer.

NKBM thus acquired a significant portion of the funds it needs to raise its Core Tier 1 capital ratio to 9%; it expects to secure the remaining funds with a capital increase that the shareholders will vote on today.

NKBM chairman Aleš Hauc said Sava Re would "definitely be a good, diligent and responsible" owner guaranteeing that Zavarovalnica Maribor would continue to develop.

Sava Re chief executive Zvonko Ivanušič labelled the agreement an "historical event" for the entire insurance market, as the acquisition creates a better competitor to the current market leader.

He said the deal would also be good for Zavarovalnica Maribor, which will be able to expand to the Balkans.

Tomaž Kuntarič, the director of SOD, said the state-owned fund was merely helping out Sava Re, which will gradually buy off the entire stake.

He said SOD entered the transaction because it supported improving NKBM's capital adequacy as well as the future growth and development of Sava Re, of which it is the biggest single shareholder.

SOD's participation hinges on its shareholder (meaning the government) approving the deal and NKBM shareholders endorsing the capital injection in the afternoon.

Zavarovalnica Maribor is also pleased with the deal, with CEO Drago Cotar saying that both previous shareholders, Sava Re and NKBM, had been "responsible owners" so little will change apart from the insurer being able to leverage its potential abroad.

NKBM had reportedly received three offers for its stake, from Sava Re as well as asset management firm KD Group and Austrian insurer Grawe, but only Sava Re submitted a binding bid.

Sava Re is Slovenia's leading reinsurer with a 53% market share in 2011, while Zavarovalnica Maribor is in no. 3 behind Zavarovalnica Triglav and Adriatic Slovenica, having a market share of just under 13%.