Italian insurance giant Assicurazioni Generali has agreed to sell 89.9% stake in its German life insurance business to the Viridium Group for up to €1.9bn.
Assicurazioni Generali holds a stake of 100% in Generali Lebensversicherung (Generali Leben) through its subsidiary Generali Deutschland, which will reduce its interest in the German life insurance business to 10.1% after the completion of the transaction.
The deal values Generali Leben up to €1bn, which includes €125m as earn out in case of changes in the reservation rules. Apart from that, €882m of loans will be reimbursed to Generali.
Assicurazioni Generali Group CEO Philippe Donnet said: “This transaction will allow us to invest in innovative solutions for our German customers, guaranteeing a higher return for our shareholders.
“Germany is a core market for Generali. The management team and all of our colleagues are working relentlessly to strengthen our position as a leader in the insurance industry. This commitment makes us confident about our future in the market.”
Based in Germany, Viridium is a specialist for the management of life insurance portfolios. The company is owned by Cinven, a London-based global private equity firm and Hannover Re, a global German reinsurer.
Upon completion of the deal, Generali Leben will become a new subsidiary of Viridium Group, joining Heidelberger Lebensversicherung, Skandia Leben and Entis.
Viridium said that the acquisition will add a portfolio of nearly 4 million life insurance contracts to its existing platform.
As per the terms of the deal, Generali Deutschland will have the option to acquire a stake of up to 10% in Viridium after closing the Generali Leben transaction, which will be subject to the approval by the German Federal Financial Supervisory Authority (BaFin).
Viridium Group CEO Heinz-Peter Roß said: “The comprehensive partnership with Generali Deutschland is an excellent solution and offers considerable advantages and long-term security for Generali Leben’s customers.
“We are pleased that some 300 employees, currently managing the closed book of Generali Leben, will become part of our group. It is a positive sign for our market segment that with Generali Deutschland, another major insurance group is showing strong interest in acquiring a stake in Viridium as a shareholder.”