Spanish insurer MAPFRE has agreed to terminate its bancassurance agreement with Caixabank, following a change in ownership last year.
The agreement sees MAPFRE sell its 51% stake Bankia’s insurance business in a deal worth €571 million, with the potential for an additional €52 million from an arbitration process.
Caixabank, which took over Bankia in March, will pay €324 million for Mapfre’s 51% stake in Bankia Vida life insurer, adding to the 49% it owned.
The other €247 million will be paid to end a contract to distribute non-life insurance.
MAPFRE says the termination of the bancassurance agreement represents an overall profit of €171 million for its operations, which will be used to reinforce its commercial strategy in Spain, with €100 million also to be allocated to a voluntary retirement program.
Likewise, MAPFRE will also advance in the digitization of its business in Italy, and will optimize its financial structure after the debt buy-back operation carried out a few weeks ago, the company said.
The €52 million submitted to arbitration remains subject to how the Bankia merger operation that gave rise to the resolution is interpreted, but could represent an additional 10% for MAPFRE, which would raise the final compensation to €623 million.
In relation to the valuation carried out, MAPFRE has expressed its disagreement with the value attributed to Bankia Vida’s business, and argues the resulting valuation is lower than the intrinsic value of the company.
Consequently, MAPFRE plans take legal action in defense of its interests in relation to the valuation of the Life business.