EXOR and Covéa ‘Normalize’ Relations After Failed PartnerRe Deal

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Italy’s EXOR said on Monday that French insurer 颁辞惫茅补 had agreed to invest a total of 1.5 billion euros ($1.8 billion), partly in entities managed by PartnerRe, after walking away from a deal to buy the reinsurer from EXOR earlier this year.

The agreement is set to “normalize” relations between the two companies, a source close to the matter told Reuters, after 颁辞惫茅补 in May pulled out of its planned $9 billion cash acquisition of the Bermuda-based reinsurer.

“This agreement draws a line under the failure of the PartnerRe deal,” the source said. “We preferred to find a productive and practical way to look ahead, which was beneficial for both parties, rather than looking into any potential controversy.”

Italian daily Il Sole 24 Ore reported that when the deal fell through the memorandum of understanding (MoU) signed by the two companies included a $175 million penalty for 颁辞惫茅补 to get out.

EXOR, the holding company of Italy’s Agnelli family, said 颁辞惫茅补 would allocate 750 million euros for undisclosed investments related to EXOR.

颁辞惫茅补 would also allocate a similar amount with a three- to five-year lock-up period in a number of special purpose insurance vehicles managed by PartnerRe, investing in property catastrophe and other short-tail reinsurance contracts.

“After having decided definitively to continue our project to build one of the world’s leading independent reinsurers, we’re more than happy now to have been able to agree with 颁辞惫茅补 this constructive cooperation extending also to other fields of our activity,” EXOR Chairman and Chief Executive John Elkann said.

($1 = 0.8519 euros) (Reporting by Valentina Za and Giulio Piovaccari; editing by James Mackenzie and Susan Fenton)