Caixa Seguridade Participações SA signed an agreement with Icatu Seguros SA to establish a new company that will operate the premium bonds line in Caixa Econômica Federal's distribution network for 20 years.
Caixa Seguridade will have a 75% stake in the new company, holding 49.99% of its common shares and 100% of its preferred shares. Icatu will hold 50.01% of the new company's common shares, corresponding to a 25% total stake, according to a news release.
The companies have set a Jan. 4, 2021, deadline for the deal's closing. Once complete, Icatu will subscribe a capital increase in the new company amounting to 180.0 million Brazilian reais. That amount will be transferred by the new company to Caixa Econômica Federal, and Caixa Seguridade will enter into a distribution agreement with new company.
The new company will remunerate Caixa Seguridade for the total selling expenses per product at predefined amounts, in addition to a performance fee linked to annual volume and profitability goals. Icatu will also pay Caixa an annual bonus corresponding to 75% of the net dividends received by Icatu from the new company that exceed certain annual targets.
Caixa Seguridade and Icatu will each appoint four members to the new company's board.
The agreement, which is subject to regulatory approvals, comes ahead of a planned initial public offering for Caixa Seguridade. The IPO is reportedly scheduled for April and could generate more than 11.5 billion reais.
As of Jan. 20, US$1 was equivalent to 4.18 Brazilian reais.