SCOR Global Life Americas Holding Inc., a subsidiary of SCOR Global Life SE, and Assicurazioni Generali S.p.A. (“Generali”) have entered into a definitive agreement pursuant to which SCOR will acquire 100 percent of Generali U.S. Holdings, Inc. (“Generali U.S.”), the holding company of Generali's U.S. life reinsurance operations, for a total cash consideration of EUR 579 million (US$750 million) plus a 2013 earnings adjustment through the closing date. This price represents a significant discount to SCOR's preliminary estimated embedded value of the Generali U.S. portfolio.
The transaction encompasses (a) the stock purchase of Generali U.S. and its operating subsidiaries, including Generali USA Life Reassurance Company (“Generali USA”), which employs a staff of approximately 120 in Kansas City; and (b) the recapture of the retrocession agreements between Generali USA and Generali.
Generali U.S.'s 2012 net earned premiums amounted to approximately EUR 700 million (approximately US$900 million), all underwritten in the U.S. and all focused on biometric risks, similar to the existing business of SCOR Global Life Americas (“SGLA”). Generali U.S. ranked as the fourth largest life reinsurer in the U.S. on 2012 recurring new business volume.
SCOR said that the transaction will be financed through the use of its own funds and a potential limited debt issuance, without the issuance of new shares.
The transaction is subject to regulatory approvals and other customary conditions and is expected to close in the second half of 2013.
Denis Kessler, chairman and chief executive officer of SCOR SE, said, “The acquisition of Generali U.S. reinforces our leadership in the life reinsurance market. The combination of SCOR Global Life Americas and Generali U.S. will become the market leader in the U.S. with a franchise focused on mortality risks. The transaction meets our strategic criteria and will be accretive for our shareholders whilst maintaining SCOR's overall solvency. Thanks to this acquisition, we continue to build on our acquisitions of Revios in 2006 and the mortality business of Transamerica Re in 2011, in order to provide the best possible product and service offering to our life insurance clients worldwide.”
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].