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 business EXOR have now signed a definitive agreement on the sale of PartnerRe, with the insurance provider to pay $9 billion to get the reinsurance company, while EXOR will now take over and continue the special function car reinsurance investment arrangements that remained in place.Covéa concurred and signed a Memorandum of Understanding to get Bermuda headquartered global reinsurer PartnerRe from Italian holding business EXOR back in October.
It is the exact same purchase cost that had initially been agreed between the pair back in early 2020, but that effort to get PartnerRe fell apart after Covéa tried unsuccessfully to renegotiate the rate in the context of the continuous pandemic situation.
After that very first acquisition attempt broke down, Covéa and EXOR struck an arrangement to work together on reinsurance-linked investments, finding 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 managed by PartnerRe.
Which supplied the company with a method to both stay included, however also significantly to diversify its incomes utilizing reinsurance underwriting earnings as well.
The arrangement was a significant increase to PartnerRes own blossoming third-party capital organization, because which the reinsurer has continued to expand this and grow its third-party reinsurance capital.
Now, with a definitive sale arrangement signed, it appears PartnerRes modification of ownership is ensured this time, while it was also confirmed that EXOR will now take on the special function reinsurance vehicle financial investments.
The agreed $9 billion rate (around EUR7.8 billion) to be paid by Covéa is based on a combined typical investors equity value of $7 billion for PartnerRe, but the offer does not include Preferred Shares noted on the NYSE.
“This deal with Covéa will strengthen PartnerRes development as a terrific business in its market thanks to a significant boost in the scale and capital strength that subscription of a bigger banks 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 unique purpose reinsurance automobiles handled by PartnerRe for approximately $725 million from Covéa, while the 3 celebrations will also continue to jointly invest in EXOR managed investment funds.
Subject to all essential approvals, the celebrations said they anticipate that the transaction will complete in mid-2022.

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