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 provider Covéa and Italian holding company EXOR have now signed a definitive arrangement on the sale of PartnerRe, with the insurance company to pay $9 billion to obtain the reinsurance firm, while EXOR will now take control of and continue the unique function car reinsurance investment contracts that were in place.Covéa agreed and signed a Memorandum of Understanding to acquire Bermuda headquartered global reinsurer PartnerRe from Italian holding business EXOR back in October.
It is the very same purchase cost that had originally been concurred between the set back in early 2020, however that attempt to get PartnerRe fell apart after Covéan attempted unsuccessfully to renegotiate the rate in the context of the continuous pandemic scenario.
After that first acquisition effort fell apart, Covéa and EXOR struck an arrangement to work together on reinsurance-linked financial investments, finding a way to settle with each other over the failed PartnerRe deal.
That settlement agreement saw Covéa injecting EUR750 million of capital into unique purpose reinsurance lorries, so successfully private collateralised reinsurance sidecar type structures, that were managed by PartnerRe.
Which provided the business with a way to both stay involved, but also significantly to diversify its sources of income using reinsurance underwriting revenues as well.
The agreement was a considerable boost to PartnerRes own blossoming third-party capital service, because which the reinsurer has actually continued to expand this and grow its third-party reinsurance capital.
Now, with a definitive sale contract signed, it appears PartnerRes change of ownership is assured this time, while it was likewise confirmed that EXOR will now take on the special function reinsurance car investments as well.
The concurred $9 billion cost (approximately EUR7.8 billion) to be paid by Covéa is based upon a combined common investors equity value of $7 billion for PartnerRe, however the deal does not include Preferred Shares listed on the NYSE.
“This transaction with Covéa will reinforce PartnerRes advancement as a great business in its industry thanks to a considerable boost in the scale and capital strength that subscription of a larger banks will bring, and the value that it represents for its customers,” the French mutual insurance provider stated.
As part of the offer, EXOR will obtain the interests in special purpose reinsurance cars handled by PartnerRe for approximately $725 million from Covéa, while the three celebrations will likewise continue to jointly invest in EXOR handled financial investment funds as well.
Topic to all required approvals, the celebrations stated they anticipate that the transaction will complete in mid-2022.

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