Brazil's Sul América SA on Aug. 22 signed an agreement to sell its automobile and other property & casualty operations to Allianz Seguros S.A., a subsidiary of Germany's insurance giant Allianz Group, according to a regulatory filing.
The agreement is worth 3.00 billion reais, based on a net equity of 700.0 million reais in the new entity "to be structured specifically for purposes of the transaction," and is subject to price adjustment mechanisms. The conclusion of the deal is also subject to regulatory approvals.
"Allianz will become one of the most important insurance companies in the automobile and property & casualty segments in Brazil, benefiting customers and brokers with years of experience and knowledge, together with new potential products and offerings in the future," Sul América noted in the filing.
The transaction illustrates Allianz Group's confidence in South America's largest economy.
Meanwhile, the Brazilian insurer said the agreement reflected its own strategy of concentrating in health, dental, life and pension segments along with asset management, while also providing it with liquidity to "take advantage of organic and inorganic growth opportunities going forward."
Sul América, which is based in Rio de Janeiro, recently agreed to sell its capitalization insurance business, also in line with the goal to refocus on core business segments.
As of Aug. 22, US$1 was equivalent to 4.05 Brazilian reais.
