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Agnelli family's Exor hits record highs on $9 billion deal

posted onFebruary 11, 2020

Italian investment group Exor jumped 5.5% on Monday (Feb.10) after confirming Sunday (Feb.9) that it is in exclusive talks to sell Bermudian reinsurance firm PartnerRe to French insurance group Covéa.

The deal could reportedly value PartnerRe at about $9 billion. Talks between Milan-listed Exor and unlisted Covea were first reported by the Insurance Insider website. 

Exor, which was founded by Italian businessman Giovanni Agnelli and is now led by Giovanni's grandson John Elkann- who is also chairman of Fiat Chrysler and Ferrari- completed the $6.9 billion acquisition of PartnerRe in 2016, after a long, hostile takeover battle.

The reinsurance company today represents roughly 30% of Exor’s current portfolio. The deal was the Turin-headquartered group’s single biggest investment and a key step in diversifying the family’s portfolio. Exor is the 24th largest group in the world, according to the 2019 Fortune Global 500 List. 

Exor share price

Mediobanca analysts say that the sale of PartnerRe would increase Exor’s appeal for mergers / acquisitions.

Meanwhile, analysts at S&P Global Ratings warn that Exor’s potential sale of BPartnerRe could improve the company’s financial flexibility, but to the detriment of its asset diversity. 

Exor’s portfolio value could decrease to about $19 billion from more than $27 billion, according to the rating agency.

S&P also believes that a PartnerRe sale could increase Exor’s portfolio exposure to the volatile automotive and capital goods sector from about 38% currently to 50%. 

S&P’s rating on the company is currently unaffected, given the uncertainty about the outcome of the transaction.

“These discussions are ongoing and there is no certainty that they will result in a transaction,” stated the firm. “EXOR will refrain from further comment until the final outcome of the discussions is known.”

Whether a deal can be reached remains to be seen, but if it closes it will be the largest M&A transaction in the reinsurance sector since French insurance group AXA acquired XL Catlin
for 12 billion in 2012.