Italian insurer Generali has agreed to sell its Swiss private banking unit, BSI, to Brazil-based Banco BTG Pactual for a total consideration of CHF1.5 billion.
The sale of BSI includes a total consideration of CHF 1.2 billion in cash and CHF 300 million in BTG units listed on the Sao Paulo Stock Exchange.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Subject to the regulatory approval, the transaction is expected to be close by the first half of 2015.
The transaction will add about 9 percentage points to its Solvency 1 ratio.
The deal comes as part of Generali’s strategy to focus on its core insurance business and improve its capital position.
Generali said that the transaction will incur a net loss of around 100 million on the sale.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataAdditionally, the deal will reduce Generali’s non-insurance activities and it is expected to be a positive factor for rating agency evaluations.
Upon completion of the deal, Generali will reach a total of 3.7 billion in disposals of non-core assets.
According to Generali, proceeds from the sale will be adjusted by any fine established pursuant to the US Department of Justice’s tax amnesty program relating to Swiss financial banking institutions payable by BSI.
Mario Greco CEO of Generali Group said: "With this transaction we exceed our Solvency 1 target, restoring the capital base of Generali over a year in advance of our 2015 plan. This sale completes the disposal process aimed at strengthening the capital base of the Group, resolving a key issue for us, and allowing Generali to focus on driving forward with its core insurance business."
