EXOR, the Agnelli family owned investment and holding company and Covéa, a French mutual insurer, have now signed a definitive agreement for the sale of reinsurer PartnerRe to Covéa for $9 billion.
It was announced in late October that renewed talks between the parties had led to a Memorandum of Understanding (MoU) between Exor and Covéa.
Now, following the completion of the required consultation with works councils, the pair have entered into a definitive agreement under which Covéa will acquire the global reinsurance company, which is wholly-owned by Exor.
The agreed $9 billion cash consideration to be paid by Covéa following completion is based on a consolidated common shareholders’ equity value of $7 billion.
Preferred Shares issued by PartnerRe and listed on the New York Stock Exchange will not be included in the proposed deal.
For PartnerRe, it’s hoped that the transaction will reinforce its development in the reinsurance sector owing to a significant increase in its scale and capital strength that comes with being part of larger financial institution.
As we discussed previously, once the deal is finalised, Exor and Covéa will maintain their reinsurance relationship, with the former acquiring from Covéa interests in special purpose reinsurance vehicles managed by PartnerRe for approximately $725 million.
Additionally, Covéa, Exor, and PartnerRe will continue to invest jointly in Exor-managed funds with reinforced alignment of interests.
Subject to obtaining approvals from the applicable regulatory and competition authorities, it is expected that the deal will close in mid-2022, based on PartnerRe’s audited consolidated common shareholders’ equity as at 31st December, 2021.