Assicurazioni Generali SpA launched a 1.2 billion-euro ($1.4 billion) bid to buy all the shares it doesn’t already own in smaller rival Societa Cattolica di Assicurazioni, as part of a strategy to cement its already-commanding presence in the home market. Generali, which has a stake of about 24% in the company, is offering investors 6.75 euros per Cattolica share in an all-cash transaction, the insurer said in a statement on Monday. The offer represents a 15% premium on the last closing price and values the smaller rival at 1.5 billion euros. Generali reorganized its top leadership earlier this year to focus on driving profitability growth. The deal adds to a flurry of transactions in the domestic insurance sector that has totalled more than 10 billion euros in the past year.
The acquisition would allow Generali to become the first in the non-life insurance market and to strengthen its presence in the life market, the insurer said in a statement. The transaction is fully aligned with business plan’s disciplined approach to M&A and its commitment to deliver profitable growth and create value for customers and shareholders. Cattolica rose as much as 14% and was up 13% at 6.83 euros In Milan, above the offer price. Generali shares also rose, trading at 16.93 euros. Generali’s offer was conditional on at least 66.7% of the shares being held after the tender, though it had said it would consider whether to proceed with acceptances if will own at least 50% plus one share. Rothschild & Co., Bank of America Corp, and Mediobanca SpA are advising Generali on the deal.