Credit Agricole Assurances (CAA), the insurance business of French bank Credit Agricole, has reached an agreement with Italian bank Credito Valtellinese (CreVal) to establish a long-term exclusive life insurance partnership.
The partnership will be valid for a period of up to 15 years. It will give CAA, through its Italian subsidiary Crédit Agricole Vita (CA Vita), access to CreVal’s distribution network for all savings products as well as certain protection products.
As part of the transaction, CAA will purchase the entire share capital of Global Assicurazioni (GA), a subsidiary of CreVal, for €80m.
Prior to the closing of the deal, CreVal will restructure GA in such a way that it will continue to be fully owned by CreVal and only comprise the business related to life insurance policies sold through the CreVal network.
Out of total cash consideration of €80m, nearly €70m will be paid at the closing of the transaction while the remaining €10m deferred payment will be released after the end of the 5th year of the partnership subject to achieving certain pre-agreed objectives.
Additionally, it is also agreed that CAA will purchase a 5% minority stake in CreVal with an option to increase the stake up to 9.9%.
Subject to the usual regulatory approvals from IVASS and AGCM, the transaction is scheduled to be completed during the fourth quarter of 2018.
The entire reorganization of the bancassurance business along with the impact of the separate agreement with Gruppo Assicurativo is expected to have a positive impact on CreVal Group’s CET1 ratio fully loaded of nearly 35 bp.