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 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 unique purpose vehicle reinsurance investment agreements that remained in place.Covéa signed a memorandum and concurred of Understanding to get Bermuda headquartered international reinsurer PartnerRe from Italian holding company EXOR back in October.
It is the same purchase price that had actually initially been agreed between the pair back in early 2020, but that effort to acquire PartnerRe fell apart after Covéan attempted unsuccessfully to renegotiate the price in the context of the continuous pandemic circumstance.
After that first acquisition effort broke down, Covéa and EXOR struck an agreement to comply on reinsurance-linked investments, discovering a way to settle with each other over the stopped working PartnerRe deal.
That settlement contract saw Covéa injecting EUR750 million of capital into special function reinsurance lorries, so successfully private collateralised reinsurance sidecar type structures, that were managed by PartnerRe.
Which supplied the company with a way to both stay included, but likewise significantly to diversify its sources of income using reinsurance underwriting revenues.
The arrangement was a significant boost to PartnerRes own growing third-party capital company, since which the reinsurer has continued to expand this and grow its third-party reinsurance capital.
Now, with a definitive sale agreement signed, it appears PartnerRes modification of ownership is ensured this time, while it was likewise validated that EXOR will now take on the special function reinsurance automobile financial investments.
The agreed $9 billion cost (roughly EUR7.8 billion) to be paid by Covéa is based upon a consolidated typical shareholders equity worth of $7 billion for PartnerRe, however the deal does not include Preferred Shares listed on the NYSE.
“This deal with Covéa will enhance PartnerRes advancement as an excellent company in its industry thanks to a substantial increase in the scale and capital strength that membership of a larger banks will bring, and the worth that it represents for its customers,” the French mutual insurer stated.
As part of the offer, EXOR will obtain the interests in special purpose reinsurance automobiles managed by PartnerRe for around $725 million from Covéa, while the three parties will likewise continue to jointly invest in EXOR handled financial investment funds.
Subject to all necessary approvals, the parties said they expect that the transaction will finish in mid-2022.

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