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 agreement on the sale of PartnerRe, with the insurance company to pay $9 billion to obtain the reinsurance company, while EXOR will now take control of and continue the special function vehicle reinsurance financial investment arrangements that were in place.Covéa signed a memorandum and concurred of Understanding to acquire Bermuda headquartered global reinsurer PartnerRe from Italian holding business EXOR back in October.
It is the very same purchase price that had actually originally been agreed between the set back in early 2020, however that effort to acquire PartnerRe fell apart after Covéa tried unsuccessfully to renegotiate the price in the context of the ongoing pandemic circumstance.
After that very first acquisition attempt fell apart, Covéa and EXOR struck an arrangement to cooperate on reinsurance-linked financial investments, finding a way to settle with each other over the failed PartnerRe deal.
That settlement contract saw Covéa injecting EUR750 million of capital into special purpose reinsurance cars, so successfully personal collateralised reinsurance sidecar type structures, that were handled by PartnerRe.
Which supplied the business with a way to both stay included, but likewise importantly to diversify its incomes using reinsurance underwriting profits also.
The agreement was a substantial boost to PartnerRes own blossoming third-party capital business, considering that which the reinsurer has continued to expand this and grow its third-party reinsurance capital.
Now, with a conclusive sale agreement signed, it appears PartnerRes modification of ownership is ensured this time, while it was also validated that EXOR will now handle the unique function reinsurance automobile investments too.
The agreed $9 billion cost (roughly EUR7.8 billion) to be paid by Covéa is based upon a combined common shareholders equity value of $7 billion for PartnerRe, but the offer does not include Preferred Shares listed on the NYSE.
“This transaction with Covéa will reinforce PartnerRes advancement as a great company in its market thanks to a substantial increase in the scale and capital strength that membership of a bigger monetary organization will bring, and the value that it represents for its clients,” the French mutual insurance company said.
As part of the offer, EXOR will get the interests in special function reinsurance automobiles managed by PartnerRe for approximately $725 million from Covéa, while the three celebrations will also continue to collectively purchase EXOR managed mutual fund as well.
Subject to all required approvals, the parties said they expect that the transaction will finish in mid-2022.

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