HDI buys Sompo unit for major expansion in Latin American market
Talanx-owned HDI International AG is strengthening its operations in Brazil, the largest insurance market in Latin America, by acquiring the retail business of Sompo Seguros SA, which is a part of the Sompo Holdings Group, for approximately BRL 1.05 billion ($220 million).
With this acquisition HDI Seguros SA in Brazil looks to gain scale in motor and to diversify into non-motor P&C and life protection business. The deal will strengthen its market position to reach rank 7 in the P&C and rank 4 in the motor insurance market.
Talanx intends to finance the transaction from its existing liquid funds. The closing of the transaction is expected mid-2023.
“In a consolidating market, scale and diversification become more and more important. This acquisition enables us to continue our success story in Brazil which is the largest insurance market in Latin America with significant profitable growth potential in the mid- and long-term,” said Wilm Langenbach (pictured), Board Member of Talanx AG responsible for the international retail business and CEO of HDI International AG.
Following the deal, HDI Seguros SA in Brazil will grow by around BRL 1.8 billion (€280 million) to approximately BRL 5.5 billion (€860 million) in gross written premiums. The combined entities of Talanx, which also operates in Brazil, would bring the group close to a “top five position” in the Brazilian P&C market.
Nicolas Masjuan, head of LatAm at HDI International AG added that “the acquisition in our core market Brazil strengthens our market position in some key regions in Brazil, especially in São Paulo, the country’s largest city, and diversifies our portfolio into Life Protection as well as gaining scale in Residential & Property. Furthermore, we are able to achieve significant synergies by combining Sompo´s retail business with our existing business in Brazil.”
As part of a strategic reorientation on the industrial lines segment in Brazil, Sompo Seguros S.A. will spin off the retail business into a new company and transfer the new company to HDI. The retail business currently comprises 22 branch offices located throughout Brazil, with a relevant concentration in São Paulo. The former retail business of Sompo Seguros ranks among the country’s top 10 motor insurers. Following a transitional period, the business will be continued under HDI’s brand.
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