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IRB Brasil Re initial public offering underway

10th July 2017 - Author: Steve Evans

The awaited initial public offering of Brazilian reinsurance firm IRB Brasil Resseguros S.A. (IRB Brasil Re) has now commenced, with the offering launched on Friday.

Brazil mapIRB Brasil Re filed its official IPO prospectus with the Sao Paolo stock exchange on Friday, detailing a plan that will see some of its existing shareholders offloading a portion of their stake in order to raise capital and bring new investors onboard.

It’s being effected through a secondary public offering of IRB Brasil Re shares by major holders, including Itaú Unibanco Holding S.A. units Itaú Seguros S.A. and Itaú Vida e Previdência S.A., BB Seguridade Participações S.A. and Banco Bradesco S.A.

Banco Bradesco SA’s investment banking team will underwrite the IPO alongside a number of other investment banks including JP Morgan, BTG Pactual and Banco do Brasil.

It’s estimated that the IPO value IRB Brasil Re at anywhere from US$2.5 billion to US$3.2 billion, with shareholders having pressed for a floor of R$8 billion (around US$2.4 billion).

IRB Brasil Re is backed by the Brazilian government, which owns a 27% stake in the reinsurer, as well as a number of major financial firms in the country. There has been discussion about reducing the stake of some shareholders for a number of years.

IRB Brasil Re was formed in 1939 with the intention of offering reinsurance to local insurers, subsequently becoming the largest domestic reinsurance firm in Brazil. The reinsurer has a desire to become more global in its outlook, we understand and the IPO could help it gain a greater international profile and reduce its reliance on local market actors.

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