By Eric Sylvers 

Exor NV, the holding company of Italy's Agnelli family, on Sunday said it is in advanced talks to sell reinsurance company PartnerRe Ltd. to French insurer Covéa Coopérations. The deal could value PartnerRe at about $9 billion, according to a person familiar with the negotiations.

Exor and Covéa confirmed they are holding talks, which had been reported earlier by The Wall Street Journal and France's Journal Du Dimanche, though the companies didn't comment on the price. Exor said it would refrain from commenting further on the talks until the outcome is known.

John Elkann, the Agnelli scion who is chairman and chief executive of Exor, wasn't looking to sell PartnerRe, but agreed to engage in the talks because he considered Covéa's initial offer to be favorable, according to the person.

Exor, which has a controlling stake in Fiat Chrysler Automobiles NV, agreed to buy PartnerRe in 2015 for $6.9 billion, the holding company's largest acquisition in its multiyear move to diversify its assets and lessen its reliance on the automobile industry.

The Agnelli family owns 53% of Exor through a holding company controlled by more than 100 descendants of Mr. Elkann's great-great-grandfather who co-founded Fiat at the end of the 19th century.

While PartnerRe produces rich dividends for Exor, which can either be reinvested or distributed to shareholders, a sale at $9 billion would allow the holding company to book a 30% gain on an asset it has held for less than four years. Exor has also received more than $650 million in dividends from PartnerRe since 2016.

It is too early to say how funds from the eventual sale of PartnerRe might be reinvested, said the person familiar with the talks.

The acquisition would allow Covéa to diversify away from its reliance on France's property and damage sectors while boosting its presence in the lucrative reinsurance business. Covéa failed last year in an attempt to buy French reinsurer Scor. The two companies engaged in an acrimonious battle that led France's banking and insurance regulator to ask them to desist for the sake of the country's financial stability.

As a general insurer, Covéa has almost no overlap with PartnerRe's business. Covéa has a AA- rating from S&P Global Ratings, giving the French company access to relatively cheap funding that could be a competitive advantage for PartnerRe, whose rating from S&P is a notch lower at A+.

Exor owns 30% of Fiat Chrysler, a stake that will be cut in half when the Italian-American car maker completes its merger with Peugeot maker PSA Group by early next year. The holding company also owns 23% of luxury car maker Ferrari, almost two-thirds of Italian soccer club Juventus and 27% of agricultural equipment maker CNH Industrial NV.

Exor also has begun investing in early-stage startups through its Exor Seeds unit.

Write to Eric Sylvers at eric.sylvers@wsj.com

 

(END) Dow Jones Newswires

February 09, 2020 13:53 ET (18:53 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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