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 insurance provider to pay $9 billion to obtain the reinsurance company, while EXOR will now take control of and continue the special function car reinsurance investment agreements that were in place.Covéa signed a memorandum and concurred of Understanding to obtain Bermuda headquartered international reinsurer PartnerRe from Italian holding business EXOR back in October.
It is the very same purchase rate that had initially been concurred in between the pair back in early 2020, however that attempt to acquire PartnerRe broke down after Covéan attempted unsuccessfully to renegotiate the rate in the context of the ongoing pandemic scenario.
After that very first acquisition attempt broke down, Covéa and EXOR struck an arrangement to work together on reinsurance-linked investments, discovering a method to settle with each other over the failed PartnerRe offer.
That settlement arrangement saw Covéa injecting EUR750 million of capital into unique function reinsurance vehicles, so efficiently personal collateralised reinsurance sidecar type structures, that were handled by PartnerRe.
Which offered the business with a way to both stay involved, but likewise significantly to diversify its sources of income utilizing reinsurance underwriting revenues.
The contract was a considerable increase to PartnerRes own blossoming third-party capital company, considering that which the reinsurer has actually continued to broaden this and grow its third-party reinsurance capital.
Now, with a conclusive sale arrangement signed, it seems PartnerRes change of ownership is guaranteed this time, while it was likewise validated that EXOR will now take on the unique purpose reinsurance car financial investments too.
The agreed $9 billion rate (around EUR7.8 billion) to be paid by Covéa is based upon a combined common shareholders equity value of $7 billion for PartnerRe, however the offer does not consist of Preferred Shares noted on the NYSE.
“This deal with Covéa will reinforce PartnerRes development as a terrific company in its market 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 customers,” the French shared insurer stated.
As part of the deal, EXOR will get the interests in unique function reinsurance cars managed by PartnerRe for around $725 million from Covéa, while the three parties will likewise continue to jointly buy EXOR handled investment funds too.
Topic to all required approvals, the celebrations said they expect that the deal will finish in mid-2022.

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