Covéa completes $9.3bn PartnerRe acquisition from EXOR

French mutual insurer Covéa has now completed its acquisition of Bermuda headquartered reinsurance company PartnerRe from Italian holding company EXOR, while reinsurance-linked investment cooperation between the companies will continue.

The company said its new reinsurance arm fits into Covéa’s long-term strategy, which is based on “anticipating changes in the global insurance industry.”

“It gives access to enhanced diversification in terms of product range, business lines and geographies in which the Group operates, thus strengthening its position across the entire risk management value chain,” Covéa said.

Covéa cites a EUR 7.9 billion price tag after FX hedging and price adjustments related to net asset values, while EXOR pegs it at $9.3 billion, including all considerations paid.

Thierry Derez, CEO of Covéa commented, “This acquisition enables Covéa to combine the expertise and support capabilities of the French market leader with those of a global risk management operator.

“With this greater diversification, our Group will strengthen its position as a key player in risk management, covering the entire value chain. This major step forward in the Group’s development is aligned with our two hundred-year history of adapting to risk transformation. It will enable us to continue to keep apace with changes in society and the expectations of our clients.”

Jacques Bonneau, PartnerRe CEO added, “This transaction is a significant step and opens a new chapter in PartnerRe’s history, bringing together our best-in class, global reinsurance expertise with one of the leaders in property and casualty insurance in Europe. Covéa’s deep financial strength and strong ratings position PartnerRe as a sustainable business partner and, together, our diversified business footprint and deep expertise create a new global leader in the reinsurance industry.”

Covéa said the acquisition is “represents a major transformation for the Group,” representing the start of a “new chapter in its history.”

Part of that new chapter is a continued cooperation with EXOR after the acquisition has completed, with reinsurance linked investments activity set to persist, as well as some investments Covéa makes into funds managed by EXOR.

Covéa had agreed and signed a Memorandum of Understanding to acquire Bermuda headquartered global reinsurer PartnerRefrom Italian holding company EXOR back in October 2021.

It is the same purchase price that had originally been agreed between the pair back in early 2020, but that attempt to acquire PartnerRe fell apart after Covéa attempted unsuccessfully to renegotiate the price in the context of the ongoing pandemic situation.

After that first acquisition attempt fell apart, Covéa and EXOR struck an agreement to cooperate on reinsurance-linked investments, finding a way to settle with each other over the failed PartnerRe deal.

That settlement agreement saw Covéa injecting €750 million of capital into special purpose reinsurance vehicles, so effectively private collateralised reinsurance sidecar type structures, that were managed by PartnerRe.

Now, as part of this finalised acquisition, EXOR has acquired the interests in special purpose reinsurance vehicles managed by PartnerRe for approximately $725 million from Covéa.

At the same time, the three parties will also continue to jointly invest in EXOR managed investment funds as well.

As we reported earlier this year, PartnerRe reported an expansion of its third-party capital and ILS management activities through 2021, which seems in part due to the reinsurance investments from the Covéa / EXOR relationship.

EXOR commented on the completion of the sale of PartnerRe, “The acquisition of PartnerRe by Covéa reinforces 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 brings, and the value that it represents for its clients.”