(Adds detail on combined market share, synergies and share movement.)

 

By Pietro Lombardi

 

Assicurazioni Generali SpA has launched a 1.18 billion-euro ($1.44 billion) takeover offer for smaller peer Societa Cattolica di Assicurazione SpA in a bid to cement its position as the largest insurer in Italy.

Generali said Monday that it is offering EUR6.75 for each share in Cattolica, which corresponds to a premium of roughly 15% to the May 28 closing price.

Generali is already Cattolica's largest shareholder, with a stake of about 24%. The deal would see Generali take the top spot in the country in the non-life insurance market, while also reinforcing its position in the life segment.

The deal is expected to lead to synergies of more than EUR80 million before tax per year, with integration costs of EUR150 million to EUR200 million in the next four years. The hit to Generali's solvency ratio would be roughly 7.8 percentage points.

The deal will be paid for with existing funds and the company doesn't expect to take on additional debt.

If the bid is successful, Generali plans to delist Cattolica, while maintaining its brand.

Generali shares rose 0.1% in European morning trade, while Cattolica gained 12%

A spokesperson for Cattolica told Dow Jones that the company has no comment at the moment.

 

Write to Pietro Lombardi at pietro.lombardi@wsj.com; @pietrolombard10

 

(END) Dow Jones Newswires

May 31, 2021 05:08 ET (09:08 GMT)

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