Agnellis Agree to Sell PartnerRe to Covea for $9 Billion

(Bloomberg) -- The Agnelli family’s Exor NV agreed to sell its PartnerRe reinsurance unit to France’s Covea for $9 billion, reviving a transaction that collapsed at the onset of the pandemic last year. 

Talks broke down in May 2020 when Exor rejected Covea’s request for a discount due to “significant uncertainties threatening the global economic outlook.”

More than a year later John Elkann, the billionaire family leader, managed to finalize the deal at the price set before the covid pandemic started. The sale marks another major deal for Elkann, 45, few months after Fiat Chrysler completed its combination to with PSA Group to create the world’s fourth-biggest carmaker. 

Exor shares gained as much as 3.6% in Milan trading to their record high, giving the company a market value of 20 billion euros ($23.3 billion). The Agnelli family, which founded Fiat about 125 years ago, owns 53% of the holding company. Exor controls Ferrari NV and is the biggest single investor in Stellantis. It also controls The Economist Group and the soccer team Juventus.  

The acquisition of PartnerRe will help Covea expand beyond home, auto, life and health insurance coverage. Insurers and reinsurers, under pressure from low to negative interest rates, have turned to dealmaking to bolster revenue, including moves into reinsurance and asset management.

Exor and Covea signed a momorandum of understanding, according to a statement late Thursday. The proposed transaction is subject to the consultation of Covea workers councils, the statement added. The two companies aim to ink a final sale agreement by year-end and to complete the transaction in mid-2022.

Broker Avalon noted that the consideration for PartnerRe is the same as Covea’s previous attempt to buy the business in 2020, while industry peers have fallen 10% to 35% in that time.

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