Agnelli Family Nears Deal on Sale of Reinsurer -- WSJ
February 10 2020 - 3:02AM
Dow Jones News
By Eric Sylvers
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (February 10, 2020).
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 10, 2020 02:47 ET (07:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Exor NV (BIT:EXO)
Historical Stock Chart
From Aug 2024 to Sep 2024
Exor NV (BIT:EXO)
Historical Stock Chart
From Sep 2023 to Sep 2024