Generali will sell its entire shareholding in Generali PanEurope to Life Company Consolidation Group for total cash proceeds at closing of up to approximately €286 million, excluding interest.
Generali will receive an initial consideration of €230 million, to which an interest component accrued until closing will be added, and a potential deferred consideration of up to €10 million, which will be paid 12 months after closing of the transaction. The company will also receive about €56 million as settlement for certain intercompany financing agreements.
The Italian insurance group said the transaction is part of its strategy to optimize its geographical footprint, increase its operational efficiency and improve capital allocation. The sale will add approximately 0.4 percentage point to the group's regulatory Solvency II ratio and is expected to generate a posttax gain of about €56 million.
Life Company Consolidation Group said Generali PanEurope's wealth protection, investment planning and employee benefits business will be combined with the existing international savings, protection and investment solutions offering of unit Utmost Wealth Solutions. The combined business will have in excess of €24 billion of client assets and significant operations in Ireland and the Isle of Man, it added.
The transaction is subject to regulatory approvals, among others, and is expected to be finalized during the first half of 2018, following which Generali PanEurope will be renamed Utmost PanEurope.
Generali PanEurope has operated in Ireland since 1999 and contributed approximately €20 million to Generali's operating result in 2016.
Nomura International Plc acted as financial adviser to Generali, while McCann FitzGerald acted as legal adviser.
