G Generali Ass

   By Anthony Shevlin 
 

Italy's Assicurazioni Generali SpA (G.MI) said Thursday that its board of directors and the supervisory board of Generali Deutschland have agreed to sell 89.9% of Generali Leben to Viridium Gruppe, which itself is owned by London-based private-equity firm Cinven Group Ltd. and Hannover Rueck SE (HNR1.XE).

The Italian company said the transaction valued Generali Leben at up to 1 billion euros ($1.17 billion) and the total estimated cash-in is up to approximately EUR1.9 billion.

The transaction includes EUR125 million as earn-out and Viridium will reimburse EUR882 million of hybrid loans to Generali group, said Generali.

Generali expects the transaction to improve its return on risk capital and lower its exposure to interest-rate risk, as well as serving the interests of customers and stakeholders through an industrial partnership.

"All of our stakeholders will benefit from [the deal]. This transaction will allow us to invest in innovative solutions for our German customers, guaranteeing a higher return for our shareholders," said Philippe Donnet, chief executive of Generali group.

The transaction will generate around EUR275 million at group level, said Generali.

Generali will have the possibility to invest in a minority stake in Viridium subject to the successful completion of due diligence, it said.

The holding company controlling Viridium, a specialist for the management of life insurance portfolios in Germany, is currently 80% owned by Cinven and 20% owned by Hannover Re.

Under the terms of the deal, Generali will manage the assets under management of Generali Leben for a five-year period through Generali Investments Europe, said Generali.

Generali will maintain a 10.1% stake in Generali Leben and a seat on the supervisory board.

The transaction is expected to be signed soon and Morgan Stanley (MS) acted as the financial advisor, Generali said.

Write to Anthony Shevlin at anthony.shevlin@dowjones.com

(END) Dow Jones Newswires

July 05, 2018 03:27 ET (07:27 GMT)

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