Mapfre in €546m acquisition in Brazil
Spain’s insurance group Mapfre is acquiring full control of the Brazilian non-life and life businesses of its strategic venture with Banco do Brasil for €546 million.
Mapfre will own 100 percent of BB Mapfre’s non-life business, (currently 50 percent), which includes business coming from both the agency channel and automobile and large risks insurance from the bank channel. The group will also control 100 percent of the life business developed via the agency channel (currently 25 percent).
BB Mapfre will continue selling life and agriculture insurance via the bank channel, as well as mortgage life insurance.
The combined transactions have a floor price of R$2.41 billion (€546 million), which is subject to adjustment in line with the meeting of automobile insurance distribution targets in the BB bank channel and the dividends that will be paid out to shareholders up to when the transaction is closed.
The new agreement will facilitate both the redefinition of the businesses developed by BB Mapfre and progress toward a more simple and efficient governance structure in those businesses that are jointly managed, which will result in reduced internal costs, with significantly improved productivity and business profitability, according to a company statement.
Antonio Huertas, chairman and CEO of Mapfre, noted that “this new configuration of the agreement will allow us to renew our alliance with Banco do Brasil, enlarge Mapfre’s business in the country, maintain exclusivity for our products in the Banco do Brasil channel, and organize our local businesses in a much simpler and more efficient manner.” Huertas added that “this agreement is clear proof of our complete confidence in Brazil’s economic development, and our commitment to both the country and our future with our partner.”
Banco do Brasil is a listed but government controlled institution and is the second largest bank by assets in the country.
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