TRIESTE (dpa-AFX) - Italian insurance group Assicurazioni Generali SpA (ARZGY.PK) Thursday announced that the company has entered into an agreement with Generali Deutschland to sell the 89.9% stake in Generali Leben to Viridium Gruppe, a specialist for the management of life insurance portfolios in Germany. The transaction is expected to be signed shortly.
The total evaluation for 100% of Generali Leben is up to 1 billion euros, including 125 million euros as earn-out in case of changes in the rules regulating the allocation to ZZR1 reserves. Viridium will also reimburse 882 million euros of hybrid loans to Generali Group.
Viridium is owned by London-based private equity firm Cinven and the global German reinsurer Hannover Re.
The transaction will serve the interests of the customers and all stakeholders through an innovative industrial partnership.
Generali will have the possibility to invest in a minority stake in Viridium, subject to the successful completion of the due diligence. The holding company controlling Viridium is currently owned by Cinven with 80% stake and Hannover Re with 20%.
Generali Leben represents approximately 36% of Generali Deutschland's Life reserves and is mainly focused on the guaranteed traditional policy business. It manages 4 million policies with traditional reserves amounting to 37.1 billion euros.
Under the terms of the agreement, Generali will manage the assets under management of Generali Leben for a 5-year period through Generali Investments Europe. Viridium will recognize a cumulative sum of 275 million euros to Generali over the 5 years.
Around 300 employees currently managing the closed book of Generali Leben shall change to a new Service Company. Viridium will maintain unchanged the working conditions for those employees, in line with the existing agreement for Generali Deutschland employees put in place in early 2018.
The transaction will be subject to the approval by the German Federal Financial Supervisory Authority or BaFin.
Furthermore, the transaction is subject to the clearance by the competent German antitrust authorities.
Copyright RTT News/dpa-AFX