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

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

French mutual insurance provider Covéa and Italian holding business EXOR have now signed a conclusive arrangement on the sale of PartnerRe, with the insurance company to pay $9 billion to acquire the reinsurance company, while EXOR will now take over and continue the special purpose vehicle reinsurance investment contracts that remained in place.Covéa concurred and signed a Memorandum of Understanding to acquire Bermuda headquartered worldwide reinsurer PartnerRe from Italian holding company EXOR back in October.
It is the very same purchase cost that had initially been concurred in between the set back in early 2020, but that attempt to acquire PartnerRe broke down after Covéa tried unsuccessfully to renegotiate the price in the context of the continuous pandemic situation.
After that first acquisition attempt fell apart, Covéa and EXOR struck a contract to cooperate on reinsurance-linked investments, discovering a way to settle with each other over the failed PartnerRe offer.
That settlement arrangement saw Covéa injecting EUR750 million of capital into unique purpose reinsurance vehicles, so successfully private collateralised reinsurance sidecar type structures, that were managed by PartnerRe.
Which offered the company with a method to both stay involved, but likewise importantly to diversify its incomes using reinsurance underwriting profits too.
The agreement was a considerable boost to PartnerRes own blossoming third-party capital company, considering that which the reinsurer has continued to broaden this and grow its third-party reinsurance capital.
Now, with a definitive sale arrangement signed, it seems PartnerRes modification of ownership is assured this time, while it was likewise confirmed that EXOR will now take on the special purpose reinsurance car financial investments too.
The agreed $9 billion cost (roughly EUR7.8 billion) to be paid by Covéa is based on a consolidated common shareholders equity value of $7 billion for PartnerRe, however the deal does not include Preferred Shares noted on the NYSE.
“This transaction with Covéa will strengthen PartnerRes advancement as a fantastic company in its market thanks to a considerable boost in the scale and capital strength that membership of a larger banks will bring, and the value that it represents for its customers,” the French shared insurance provider stated.
As part of the deal, EXOR will get the interests in unique purpose reinsurance automobiles managed by PartnerRe for around $725 million from Covéa, while the three celebrations will likewise continue to jointly invest in EXOR managed financial investment funds.
Topic to all required approvals, the celebrations stated they expect that the transaction will complete in mid-2022.

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