Italian insurer Assicurazioni Generali has entered into an agreement with Grupo BTG Pactual, Latin America's independent investment bank, to divest its Swiss private bank operation BSI Group, for a total consideration of CHF1.5bn ($1.7bn).

Generali

The agreement follows an earlier announcement made by Generali in May this year, whereby the Italian company had granted exclusivity to Banco BTG Pactual to conduct negotiations relating to the potential acquisition of the entire share capital of BSI.

The transaction has been structured into CHF1.2bn ($1.34bn) in cash and CHF300m ($336.26m) in BTG units listed on the Sao Paulo Stock Exchange.

Commenting on the deal, Generali Group CEO Mario Greco said, "With this transaction we exceed our Solvency 1 target, restoring the capital base of Generali over a year in advance of our 2015 plan."

"This sale completes the disposal process aimed at strengthening the capital base of the Group, resolving a key issue for us, and allowing Generali to focus on driving forward with its core insurance business.

The Trieste-based insurer noted that the sale of BSI is part of its strategy to concentrate on its core insurance business and improve its capital position.

Upon completion of the transaction, which is expected to be completed by the first half of 2015, Generali will reach a total of €3.7bn in disposals of non-core assets.

JP Morgan and Mediobanca acted as financial advisors on the transaction for Generali.

In order to strengthen its liquidity and capital positions, Generali has already offloaded its US reinsurance unit and Mexican businesses in 2013.


Image: Generali’s headquarters in Trieste, Italy. Photo: courtesy of Zinn.