French firm calls off deal to buy PartnerRe
A deal to sell a Bermudian-based reinsurer to a French mutual insurance group has been called off.
A $9 billion cash agreement to sell PartnerRe to Paris-based Covéa was reached in March, but the French firm said that due to the “significant uncertainties threatening the global economic outlook” it would not go ahead with the purchase of the firm from Exor.
Exor, an Italian investment firm controlled by the Agnelli family of Fiat fame, bought PartnerRe in 2016.
It said it would retain ownership of the business and that PartnerRe was not expected to be significantly affected by the Covid-19 pandemic.
Covéa said: “In light of the current unprecedented conditions and significant uncertainties threatening the global economic outlook, Covéa has indicated to Exor that the context does not allow the contemplated acquisition of PartnerRe to be carried out on the terms initially envisaged.”
Exor said its chairman John Elkann and board of directors had acknowledged Covéa's notice that it would not honour its commitment to acquire PartnerRe in line with the memorandum of understanding announced on March 3.
The Italian firm added that the board recognised “the positive outlook for PartnerRe, which enjoys one of the highest capital and liquidity ratios in the global reinsurance industry and is not expected to be significantly affected by the Covid-19 outbreak”.
Exor said that the board had underlined its belief that a sale of PartnerRe on terms inferior to those established in the MOU failed to reflect the value of the company.
A statement from Exor added: “In attempting to renegotiate the agreed deal terms, Covéa 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 honour its commitments under the MOU and Exor believes that no such basis exists.”