France’s Covéa is in exclusive talks to buy PartnerRe, the Bermuda insurer controlled by Italy’s billionaire Agnelli family, in an all-cash deal that would be worth $9bn, people close to the discussions said.
A deal would mark the latest example of consolidation in the sector and a return to dealmaking for Covéa, which has been searching for an acquisition in the reinsurance industry for the past two years.
People close to the talks said the negotiations between the two companies are exclusive and follow an unsolicited approach from Covéa to buy PartnerRe at the start of the year. A tie-up may be agreed within the next few weeks and no deal is guaranteed. News of the talks was first reported by Bloomberg.
Exor’s decision to consider a sale comes less than five years after it acquired PartnerRe for $6.9bn after winning a hostile takeover battle against rival bidder Axis Capital. At the time the move was driven by John Elkann, scion of the Agnelli family, who was seeking to diversify the Italian group’s investments away from heavy industry and into financial services.
Buying PartnerRe would allow Covéa, led by chief executive Thierry Derez, to diversify its earnings. The company is mostly focused on personal and business cover in France, although it also has operations in the US, UK and Italy. Partner Re would give it access to a new multinational customer base.
The French insurer, which is owned by its customers, made a hostile takeover bid for Paris-based reinsurer Scor in 2018. That move was forcefully rebuffed by Scor and a bitter battle that ensued led to multiple lawsuits being filed.
Covéa did not respond to requests for comment. Exor confirmed the talks in a brief statement. “There is no certainty that they will result in a transaction,” it said. “Exor will refrain from further comment until the final outcome of the discussions is known.”
The approach for PartnerRe comes as the reinsurance industry — which sells insurance to other insurance companies — is undergoing a resurgence. Several years of expensive natural disasters have led to rising prices for cover.
Share prices of companies such as Swiss Re, Munich Re and Scor — all rivals to privately held Partner Re — have been rising since the middle of last year.
The specialist insurance and reinsurance industry has been consolidating during the past few years. In 2018 Axa spent $15bn buying XL Group, which operated in some of the same markets as Partner Re. Axa’s shareholders initially had some reservations about the deal.
A strong return on Exor’s purchase of PartnerRe would represent a big win for Mr Elkann, whose decision to pay a lofty premium to acquire the reinsurer was greeted with some scepticism at the time of the takeover.
The 43-year-old Mr Elkann, who runs Exor on behalf of his family, has been transforming the holding company during the past several years and moving it out of capital-intensive, industrial businesses. In December, Exor agreed to a deal that will see Fiat Chrysler Automobiles merge with French rival Peugeot, creating the world’s fourth-largest carmaker.
Additional reporting by Michael Pooler in Paris