Coface, which is currently fully-owned by Natixis, offers adapted risk prevention, monitoring and protection services
Coface is a France-based trade credit insurance provider. (Credit: Wikipedia/Swaf75)
Arch Capital Group has agreed to acquire a stake of 29.5% in Coface, a France-based provider of trade credit insurance, for about €480m from Natixis.
Headquartered in Bois-Colombes, the credit insurer offers adapted risk prevention, monitoring and protection services. It serves firms across all sectors, irrespective of their size and nationality.
The French firm, which was established in 1946 as a specialist in export credit insurance, employs nearly 4,300 people across 66 countries.
Coface’s services and solutions are said to protect and help firms take credit decisions to boost their ability to sell on their domestic and also export markets.
Natixis became the main shareholder in Coface in 2002. About four years later, the French banking company took 100% ownership in the credit insurance company.
The banking company stated: “The transaction is expected to trigger the deconsolidation of Coface in Natixis’ accounts at closing and to free up an overall ~35bps of CET1 ratio, mainly driven by a ~€3.5bn release of risk-weighted assets. The announcement of the sale will also generate a one-off goodwill impairment of ~ €100m in the first quarter of 2020, with no impact on Natixis’ CET1 ratio.”
Arch Capital, which is a Bermuda-based speciality and mortgage insurance company, is acquiring the minority stake in the credit insurer at €10.70 per share.
Arch Capital CEO comments on the stake acquisition in Coface
Arch Capital CEO Marc Grandisson said: “This is a long-term, strategic investment in Coface, and fits with Arch’s efforts to develop uncorrelated sources of underwriting income. Our companies share a focus on specialty underwriting where knowledge and expertise create value for our clients, and trade credit contributes to Arch’s specialty-driven business model.”
The closing of the deal, which is expected to take six to twelve months, will be subject to antitrust and regulatory approvals from authorities such as the Autorité de Controle Prudentiel et de Résolution (ACPR).