Despite the global COVID-19 coronavirus pandemic having a significant impact on European countries, driving meaningful and widespread financial market volatility, Covéa has reportedly said that it remains committed to its deal with Exor to acquire reinsurer PartnerRe.
In early March, Covéa and Exor announced the signing of a Memorandum of Understanding (MoU), under which Covéa agreed to acquire the Bermudian reinsurer for a total cash consideration of $9 billion, plus a cash dividend of $50 million to be paid before closing.
The deal represents a sizeable profit for the Italian holding company, having purchased PartnerRe in 2016 for a cash consideration of $6.72 billion, and is viewed as beneficial for PartnerRe by rating agencies.
Since the two companies reached an agreement, the spread of the COVID-19 outbreak has accelerated and intensified across Europe, bringing a halt to normality for millions of industries and individuals as countries implement increasingly strict measures in an effort to mitigate the social and financial impact of the pandemic.
But in spite of the clear and ongoing impacts to many European countries and markets, Reuters has reported that Daily II Sole 24 Ore, an Italian national daily newspaper headquartered in Milan, cited a source close to Exor saying that the terms of the deal were not being renegotiated and that now, a deal made even more sense.
Reuters adds that a spokeswoman for French insurer Covéa said that the insurer was also committed to completing the planned deal.
Only time will tell exactly what impact the COVID-19 pandemic will have on countries and markets across Europe and the rest of the world, but it’s promising to hear that both parties remain committed to the deal despite the challenges.
As we discussed recently, pressures from the coronavirus outbreak have caused a spike in market volatility and some significant declines in share prices, suggesting that there could be some questions raised over some of the larger merger & acquisition (M&A) deals scheduled for completion in 2020 and beyond.
