By Pietro Lombardi 
 

Shares in Exor NV, the holding company of Italy's Agnelli family, are under pressure after the proposed $9 billion sale of its reinsurance business collapsed.

This comes as the latest deal to falter amid the coronavirus pandemic, and as Exor--which also controls Fiat Chrysler Automobiles NV--is in the midst of planning to merge the Italian-American car maker with French peer Peugeot SA.

At 1154 GMT, Exor shares were down 5.2%.

"The news is undoubtedly negative," Equita SIM's Martino De Ambroggi said, adding that it does however, in light of the planned Fiat Chrysler-Peugeot deal, send a message.

"From a qualitative standpoint Exor shows that it does not need to sell and sends a clear message to those speculating on a possible revision of the merger with PSA terms, showing that it is not willing to change the what agreed," Mr. De Ambroggi said.

Exor said late Tuesday that the planned sale of PartnerRe to French insurer Covea had been scrapped after the company tried to renegotiate the terms of the deal. It said Covea wouldn't carry out the acquisition under the terms agreed in March.

The company said selling the reinsurance business at a price below the $9 billion previously agreed wouldn't reflect its value, adding that PartnerRe is not expected to take a significant hit from the coronavirus pandemic.

"In attempting to renegotiate the agreed deal terms, Covea has never suggested the existence of a material adverse change, including pandemic risk, or any other issues at PartnerRe that would explain its refusal to honor its commitments under the MOU and Exor believes that no such basis exists," it said.

In a statement released on Tuesday, Covea said that "in light of the current unprecedented conditions and significant uncertainties threatening the global economic outlook, Covea has indicated to Exor that the context does not allow the contemplated acquisition of PartnerRe to be carried out on the terms initially envisaged."

The failed transaction is just one of several big deals that the coronavirus pandemic has torpedoed in recent weeks, including Xerox Holdings Corp.'s bid for rival HP Inc., a deal valued at more than $30 billion.

 

Write to Pietro Lombardi at pietro.lombardi@dowjones.com

 

(END) Dow Jones Newswires

May 13, 2020 08:16 ET (12:16 GMT)

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