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 company EXOR have now signed a conclusive contract on the sale of PartnerRe, with the insurer to pay $9 billion to obtain the reinsurance company, while EXOR will now take control of and continue the special purpose car reinsurance investment contracts that were in place.Covéa signed a memorandum and agreed of Understanding to obtain Bermuda headquartered worldwide reinsurer PartnerRe from Italian holding business EXOR back in October.
It is the exact same purchase price that had actually initially been agreed between the pair back in early 2020, but that attempt to get PartnerRe broke down after Covéan attempted unsuccessfully to renegotiate the price in the context of the continuous pandemic situation.
After that first acquisition effort broke down, Covéa and EXOR struck a contract to comply on reinsurance-linked investments, finding a method to settle with each other over the stopped working PartnerRe deal.
That settlement agreement saw Covéa injecting EUR750 million of capital into unique purpose reinsurance lorries, so effectively private collateralised reinsurance sidecar type structures, that were managed by PartnerRe.
Which supplied the company with a way to both stay involved, but likewise notably to diversify its sources of earnings utilizing reinsurance underwriting revenues.
The arrangement was a significant increase to PartnerRes own burgeoning third-party capital organization, given that which the reinsurer has actually continued to broaden this and grow its third-party reinsurance capital.
Now, with a conclusive sale agreement signed, it appears PartnerRes change of ownership is assured this time, while it was also confirmed that EXOR will now take on the special function reinsurance car financial investments.
The agreed $9 billion price (roughly EUR7.8 billion) to be paid by Covéa is based upon a combined typical shareholders equity value of $7 billion for PartnerRe, but the deal does not include Preferred Shares noted on the NYSE.
“This transaction with Covéa will enhance PartnerRes development as an excellent company in its market thanks to a considerable increase in the scale and capital strength that subscription of a larger banks will bring, and the worth that it represents for its clients,” the French mutual insurer stated.
As part of the offer, EXOR will get the interests in unique purpose reinsurance vehicles managed by PartnerRe for around $725 million from Covéa, while the three parties will also continue to jointly purchase EXOR managed mutual fund also.
Subject to all required approvals, the celebrations stated they anticipate that the transaction will finish in mid-2022.

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