Covéa-PartnerRe agree to merge in a $9bn ‘definitive’ deal

PartnerRe, the global reinsurer wholly-owned by Exor, and French mutual insurer  Covéa have signed a “definitive agreement” to merge in a  deal worth $9 billion.

The news follows Italian investment company Exor’s Memorandum of Understanding (MoU) with Covéa in late-October for the sale of PartnerRe.

Covéa will buy the reinsurer for the exact same price it offered over a year ago but decided to walk away from the deal blaming the pandemic. The agreed cash consideration of $9 billion to be paid by Covéa on the closing of the transaction is based on a consolidated common shareholders’ equity value of $7 billion.

Preferred Shares issued by PartnerRe and listed on the NYSE will not be included in the proposed acquisition.

Exor believes the deal with Covéa will reinforce PartnerRe’s development as a “great company” in its industry. “Thanks to a significant increase in the scale and capital strength that membership of a larger financial institution will bring, and the value that it represents for its clients,” the investment company said in a statement.

Following the closing of the transaction, Exor and Covéa will continue their reinsurance cooperation, with Exor acquiring from Covéa interests in special purpose reinsurance vehicles managed by PartnerRe for approximately $725 million. Covéa, Exor and PartnerRe will also continue to invest jointly in Exor-managed funds with reinforced alignment of interests.

Subject to obtaining approvals from the applicable regulatory and competition authorities, the deal is expected to close in mid-2022, based on PartnerRe’s audited consolidated common shareholders’ equity as at December 31, 2021.

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