Generali has entered into a share purchase agreement to sell its entire shareholding in Generali PanEurope with Life Company Consolidation Group (LCCG) for an initial consideration of EUR 230 million.
Frédéric de Courtois, Group Chief Executive Officer, (CEO) Global Business Lines & International, said; “this transaction underscores our ongoing efforts to rationalize Generali’s geographical footprint across the globe.
“After having agreed to sell our operations in a number of other markets, this transaction is a further step towards the strategy announced just over a year ago at our Investor Day presentation, a strategy we are well on target to complete.”
Nomura International acted as financial advisor to Generali while McCann FitzGerald acted as legal advisor.
In relation to its Group Risk offering, the company will remain active in employee benefits and act as the Irish partner of the Generali Employee Benefits network (GEB) to serve its existing and future clients.
Generali will receive about €56 million as settlement for certain intercompany financing arrangements, for total cash proceeds at closing of approximately €286 million.
The contribution of Generali PanEurope to the Group’s operating result was approximately €20 million in 2016.
The transaction will add approximately 0.4 percentage points to the Group’s Regulatory Solvency II ratio, and it is expected to generate a post-tax gain of approximately €56 million.
An interest component accrued until closing will be added and a potential deferred consideration of up to €10 million to be paid 12 months after closing.
The transaction is part of a strategy to optimise LCCG’s geographical footprint, increase operational efficiency and improve capital allocation.
The transaction is subject to regulatory approvals and is expected to be finalized during the first half of 2018.