Bpm bank takes over the joint venture with Cattolica Assicurazioni. The bank led by Giuseppe Castagna has exercised the call option on 65% of the share capital of True Life e True Insurance. The price of the transaction is equal to 392,5 million euros.
Banco Bpm buys the jvs with Cattolica Assicurazioni
The bank will acquire 65% of the capital of the two joint ventures in which it already held 35%. To the exercise price for the repurchase of both investments, equal to 392,5 million, must be added 65% of the operating result of the companies accrued from the beginning of 2023 up to the closing date.
Exercise of the call option was envisaged in the 2021 agreements and, according to a note released by Banco Bpm, will allow the institution to "create one of the leading national captive groups in Life Bancassurance” and to ''extend the range of Life products available to customers and increase the offer integrated in Wealth Management”, “increase commission income with a significant impact on the Group's profitability and achieve important synergies between the Group's product factories thanks to the increase in Life insurance volumes”.
From a regulatory point of view, the operation will be able to benefit from access to the benefits deriving from the application of the Danish compromise.
As far as the effects on capital ratios, deriving from the acquisition from Cattolica of 65% of Vera Vita and Vera Assicurazioni and from the simultaneous sale to Crédit Agricole Assurances of 65% of Vera Assicurazioni and Banco Bpm Assicurazioni, an impact of -15 basis points is estimated in the hypothesis of non-application of the Danish Compromise (while the benefits of the Danish Compromise remain confirmed in the amount already communicated and 'conservatively quantified at 58 basis points').
Closing at the end of 2023, operation in line with the 2024 plan
The exercise of the option to purchase the shares is part of the strategy to strengthen the bank's business model which, in line with the strategic plan 2021-2024, provides for the internationalization of the “Life” insurance business, already started with the acquisition of the entire share capital of the other bancassurance jv, Banco Bpm Vita da Covéa, and the activation of a strategic partnership with Crédit Agricole in non-life bancassurance and protection.
The closing of the transaction with Cattolica Assicurazioni for the purchase of 65% of Vera Vita and Vera Assicurazioni will be finalized at the same time as the execution of the agreements with Crédit Agricole Assurances in the Non-Life/Protection sector and is expected during the of the last quarter of 2023subject to the green light from the competent Authorities.
Transaction linked to agreements with Crédit Agricole
The operation, in fact, is prodromal to the execution of the agreements with Crédit Agricole Assurances, a company of the Crédit Agricole group, which envisage “the acquisition by Caa of the stake in 65% in Banco Bpm Assicurazioni (a company active in the Non-Life sector currently 100% controlled by Banco Bpm through Banco Bpm Vita) and, subject to the repurchase by Banco Bpm of the investment currently held by Cattolica Assicurazioni, of 65% in Vera Assicurazioni (and, indirectly , in True Protection), as well as starting a commercial partnership lasting 20 years in the Non-Life/Protection sector, which will have as its objective the preparation of insurance products to be placed by both the Banco Bpm network and the Agos network, a consumer credit company belonging to the Crédit Agricole Group, which controls a 61% share in the capital, and is 39% owned by Banco BPM”.
In this regard, the extension of the deadline for the exercise was finally agreed of the put option (put option) referring to a 10% share of the capital of Agos Ducato held by Banco Bpm, at the exercise price already agreed of 150 million, for a further two-year period, i.e. until 31 July 2025.
