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 company EXOR have now signed a definitive contract 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 special function automobile reinsurance financial investment arrangements that remained in place.Covéa concurred and signed a Memorandum of Understanding to obtain Bermuda headquartered international reinsurer PartnerRe from Italian holding company EXOR back in October.
It is the very same purchase price that had initially been agreed in between the pair back in early 2020, however that effort to acquire PartnerRe broke down after Covéa tried unsuccessfully to renegotiate the cost in the context of the ongoing pandemic situation.
After that very first acquisition attempt fell apart, Covéa and EXOR struck an agreement to work together on reinsurance-linked financial 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 function reinsurance cars, so effectively personal collateralised reinsurance sidecar type structures, that were managed by PartnerRe.
Which provided the company with a way to both stay involved, but also significantly to diversify its sources of income using reinsurance underwriting revenues.
The arrangement was a significant boost to PartnerRes own blossoming third-party capital business, because which the reinsurer has continued to broaden this and grow its third-party reinsurance capital.
Now, with a conclusive sale agreement signed, it seems PartnerRes modification of ownership is assured this time, while it was likewise verified that EXOR will now handle the unique purpose reinsurance lorry investments also.
The agreed $9 billion price (approximately EUR7.8 billion) to be paid by Covéa is based upon a combined typical investors equity worth of $7 billion for PartnerRe, however the deal does not consist of Preferred Shares noted on the NYSE.
“This transaction with Covéa will strengthen PartnerRes advancement as a terrific company in its industry thanks to a substantial increase in the scale and capital strength that membership of a bigger banks will bring, and the value that it represents for its clients,” the French shared insurance company stated.
As part of the offer, EXOR will acquire the interests in special function reinsurance cars managed by PartnerRe for roughly $725 million from Covéa, while the three parties will likewise continue to jointly invest in EXOR handled financial investment funds.
Topic to all necessary approvals, the parties stated they expect that the deal will complete in mid-2022.

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