Covéa & EXOR sign on $9bn PartnerRe sale. Reinsurance investments to continue

Covéa & EXOR sign on $9bn PartnerRe sale. Reinsurance investments to continue

French shared insurance company Covéa and Italian holding business EXOR have now signed a definitive contract on the sale of PartnerRe, with the insurer to pay $9 billion to acquire the reinsurance company, while EXOR will now take over and continue the special function vehicle reinsurance financial investment contracts that were in place.Covéa signed a memorandum and agreed of Understanding to obtain Bermuda headquartered international reinsurer PartnerRe from Italian holding business EXOR back in October.
It is the same purchase price that had actually initially been agreed in between the pair back in early 2020, but that effort to acquire PartnerRe fell apart after Covéa tried unsuccessfully to renegotiate the cost in the context of the ongoing pandemic scenario.
After that first acquisition effort broke down, Covéa and EXOR struck a contract to comply on reinsurance-linked investments, discovering a method to settle with each other over the stopped working PartnerRe offer.
That settlement contract saw Covéa injecting EUR750 million of capital into unique function reinsurance cars, so successfully personal collateralised reinsurance sidecar type structures, that were handled by PartnerRe.
Which provided the business with a method to both stay involved, however also importantly to diversify its income sources utilizing reinsurance underwriting revenues as well.
The arrangement was a substantial increase to PartnerRes own growing third-party capital organization, because which the reinsurer has continued to broaden this and grow its third-party reinsurance capital.
Now, with a definitive sale arrangement signed, it appears PartnerRes change of ownership is ensured this time, while it was likewise confirmed that EXOR will now take on the special function reinsurance car financial investments.
The agreed $9 billion price (approximately EUR7.8 billion) to be paid by Covéa is based on a combined typical investors equity value of $7 billion for PartnerRe, but the deal does not include Preferred Shares listed on the NYSE.
“This transaction with Covéa will reinforce PartnerRes development as a fantastic company in its industry thanks to a substantial increase in the scale and capital strength that membership of a bigger financial institution will bring, and the value that it represents for its clients,” the French shared insurance provider said.
As part of the deal, EXOR will acquire the interests in unique function reinsurance vehicles managed by PartnerRe for roughly $725 million from Covéa, while the three parties will also continue to collectively invest in EXOR handled investment funds.
Subject to all essential approvals, the parties stated they anticipate that the deal will finish in mid-2022.

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