Generali won’t cut shareholder pay to fund M&A, but might manage both
European insurance group Generali may or may not be harbouring further M&A ambitions, but wouldn’t let that any such hopes get in the way of an established trend for ever-increasing shareholder remuneration, CEO Philippe Donnet has argued.
“This shareholder-friendly trend will continue,” Donnet said of what he called an eight-year history of rising dividends and the more recent resumption of share buy-backs. “Dividend and capital management has been increasingly shareholder-friendly.”
Comments come as Generali hits the headlines as the would-be buyer of nearly any European carrier that might come on to the market. Bloomberg put the wish list at over half a dozen firms, including several larger names.
The sum of the reports are “only press rumours,” Donnet said. “These are facts,” he said of the run-up in shareholder remuneration. “Between press rumours and facts you can easily make the choice.”
Generali’s recent track record suggests Donnet may believe he has the strength to do both at once. Generali has resumed share buybacks after a long hiatus and just announced an acceleration off dividend growth, all after a record year of M&A announcements in 2023, including Liberty Seguros retail in Europe and Conning asset management.
“The past few years we were able to do all of these together with €7 billion in M&A,” Donnet said under questioning during his company’s fourth quarter earnings call.
Donnet brushed off suggestion that his comments on rising shareholder remuneration necessarily pointed to smaller M&A deals. “It’s not about the size, it’s about the value creation potential for all stakeholders,” Donnet told analysts.
“We’ve been very disciplined so far,” Donnet said, “never went out of the stated framework for M&A.” Targets have to pass a financial, strategic and cultural litmus test.
“We continue being very selective.”
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