Generali will be issued 54,054 million shares of Cattolica Assicurazioni at an issue price of €5.55 per share
Generali has agreed to acquire a stake of 24.4% in rival Italian insurance company Cattolica Assicurazioni via a reserved share capital increase for €300m.
The deal entails Generali to become a major shareholder of Cattolica Assicurazioni after meeting certain conditions by subscribing to a share capital increase, without option rights. In this connection, Generali will be issued 54,054 million shares of its rival insurance firm at an issue price of €5.55 per share.
The deal will be subject to the transformation of Cattolica Assicurazioni into a joint-stock company. Currently, Cattolica is said to be the only cooperative company in the insurance industry that is listed on the Milan Stock Exchange.
Operating since 1896, the Italian insurance company recorded nearly €7bn in premium income at the end of 2019. The company is said to cater to nearly 3.6 million customers with its insurance solutions and products.
As per the parties, Generali also holds the option to subscribe, on a pro-rata basis, the subsequent capital increase, which will be optioned for all shareholders, for an additional amount of up to €200m.
Generali, Cattolica Assicurazioni to form strategic partnership in four areas
Through the stake acquisition, Generali will be forming a strategic partnership with Cattolica Assicurazioni with a focus on four business areas that include health, reinsurance, asset management, and Internet of Things.
Generali Italia and global business lines country manager and CEO Marco Sesana said: “The strategic partnership with Cattolica represents a unique opportunity currently in Italy for profitable growth in asset management and innovative services for P&C customers, pillars of our 2021 Life-time Partner strategy.
“This allows us to extend our health and telematic services to the more than 3.5 million Cattolica customers, thanks to the innovative platforms of Generali Welion and Generali Jeniot.”
Generali Welion’s health services, which are presently not part of Cattolica Assicurazioni’s product offer, will be offered to the latter’s customers. In addition to that, a part of Cattolica Assicurazioni’s settlement and assistance services will be outsourced to Generali Welion.
Under the reinsurance partnership, Generali will be the main partner regarding a portion of risks that have to be reinsured.
Cattolica Assicurazioni chairman Paolo Bedoni and general manager Carlo Ferraresi said: “The strategic partnership with the Generali Group represents an important project in Cattolica’s history which, with the objective of maintaining the focus on local territories, customers and employees, offers an important opportunity to create value for members and shareholders.
“Through this agreement, the Cattolica Group will provide benefits for its customers in terms of new and innovative services from the Generali Group, and will be able to reinforce its capital position.”