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UniCredit starts process to bring life insurance business in house
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MILAN (Reuters) – UniCredit has told Allianz and CNP Assurances that it will buy their stakes in the life insurance joint ventures it runs with them as it brings the
MILAN (Reuters) – UniCredit has told Allianz and CNP Assurances that it will buy their stakes in the life insurance joint ventures it runs with them as it brings the business in house, it said on Wednesday.
The decision follows regulatory changes that render permanent capital relief measures known as ‘Danish compromise’ for banks that own insurance businesses. UniCredit will continue to partner with Alliance in non-life, it said in a statement.
The announcement comes as Italy’s No.2 bank has come under fire in Germany for building a close to 21% stake in Commerzbank and is seeking takeover talks.
UniCredit said it had told Allianz and CNP Assurances that it would exercise the call option allowing the Italian bank to gain full control of the ventures it has with its two insurance partners.
In order to do so, UniCredit will buy from CNP Assurances its 51% stake in their CNP UniCredit Vita joint venture. Similarly, it will buy from Allianz the 50% stake the insurer holds in the UniCredit Allianz Vita venture.
The price to be paid for UniCredit to gain full ownership of CNP UniCredit Vita will be determined based on methodologies the two partners previously agreed, it said.
The accord with Allianz meanwhile envisages hiring a third party expert to determine the price of the stake UniCredit is repurchasing.
The two transactions are expected to close in 2025.
(This story has been corrected to show that the stake in UniCredit Allianz Vita being repurchased by the bank is 50%, not 51%, in paragraph 5)
(Reporting by Valentina Za; Editing by Emelia Sithole-Matarise)
A joint venture is a business arrangement where two or more parties agree to pool their resources for a specific task, sharing profits, losses, and control of the enterprise.
Capital relief refers to regulatory measures that allow banks to reduce the amount of capital they are required to hold against potential losses, often by investing in certain types of assets.
A call option is a financial contract that gives the holder the right, but not the obligation, to purchase an asset at a specified price within a specific time frame.
A stake in a business refers to the ownership interest or share that an individual or entity holds in a company, which can influence control and profit distribution.
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