Covea, a leading French mutual insurer, has agreed to acquire PartnerRe, the global reinsurer that is ranked among the top 15 reinsurance companies in the world. Covea signed a Memorandum of Understanding with Exor, the leading diversified holding company controlled by the Agnelli family, to acquire Partner Re which is wholly owned by Exor. The cash consideration of $9.0bn to be paid by Covea on the closing of the transaction is based on a consolidated common shareholders’ equity value of $7bn. Preferred shares issued by PartnerRe and listed on the New York Stock Exchange would not be included in the proposed acquisition. Covea says in a statement that the acquisition of PartnerRe is consistent with its long-term strategy to anticipate the evolution of the global insurance environment through international growth and through the diversification of products, risks, and geographies. The entry at scale into the global reinsurance business represents a further step in Covea’s development into a top tier European diversified insurance and reinsurance group.
The reinsurance and investment cooperation agreements implemented by Exor, PartnerRe and Covea in August 2020 have resulted in an even greater appreciation by Covea of the shared culture with PartnerRe of customer service excellence, deep technical expertise, and underwriting discipline. This has also facilitated close cooperation between the PartnerRe and Covea executive and operating teams. A transaction with Covea would 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 would bring, and the value placed on this by primary insurance clients when reinsuring their risks, says Covea. It is also envisaged that following a successful closing of the transaction, Exor and Covea would continue their reinsurance cooperation, with Exor acquiring from Covea interests in special purpose reinsurance vehicles managed by PartnerRe for approximately $725m. These vehicles will invest in property catastrophe and other short-tail reinsurance contracts underwritten by PartnerRe.