PPF Group agrees to sell its 49% in Generali PPF Holding (“GPH”) to Assicurazioni Generali
PPF Group announces that it has agreed to sell its 49% shareholding in Generali PPF Holding (“GPH”), its successful insurance joint venture in the CEE region, to its partner in the venture Assicurazioni Generali.
- Transaction values GPH at €5.1 billion and PPF Group’s 49% shareholding at €2.52 billion before the acquisition by PPF Group of GPH’s insurance operations in CIS countries for €80 million
- As a part of the transaction, a dividend payment of €352 million will be disbursed to shareholders in the first quarter of 2013 before the closing of the transaction. GPH to pay shareholders dividends representing 66% of profits accrued in 2013 and 2014
- The sale will be in two stages: 25% of GPH to be purchased by Generali by 28 March 2013 with the remaining 24% to be acquired at the end of 2014
- Transaction includes a no-cash equity swap whereby Generali will increase its stake in Ingosstrakh to 38.5% by acquiring all the shares in the PPF Beta fund; PPF Group will take full control of the PPF Partners private equity business
Petr Kellner, founder and majority shareholder of PPF Group, commented: “With this deal, we take another important step in the PPF Group’s development. The transaction consideration plus the significant dividends earned over the past five years represent an excellent return on our initial investment. The deal marks the end of an era that started with our acquisition of Ceska pojistovna, the biggest Czech insurance company, 16 years ago. This said we also open a new chapter with a superb platform for our future development with the key businesses we are retaining in the CIS that fit perfectly with our growing financial services business in those countries.”
Assicurazioni Generali, which currently holds 51% of Generali PPF Holding, is to purchase the remaining 49% of the GPH share capital it does not already own from PPF Group N.V. in two stages for a total consideration of €2.52 billion.
The sale of PPF Group’s 49% shareholding in GPH will occur in two-stages:
- By 28 March 2013, Assicurazioni Generali will acquire a 25% shareholding in GPH currently held by PPF Group for a consideration of €1,286,000,000. This amount will be used to reimburse 51% of the €400 million bond underwritten by the Generali Group and issued by a PPF Group subsidiary in 2009 as well as 51% of a loan for approximately €2 billion granted to PPF Group in 2007 by a pool of banks.
- At or around 31 December 2014 PPF Group will receive a balancing payment of €1,234,560,000 million for its outstanding 24% shareholding in GPH and the remaining amounts due on the bond and the loan will be reimbursed at the same time.
The agreement also provides for a dividend payment of €352 million that is to be disbursed to the shareholders prior to the completion of the transaction in the first quarter of 2013, as well as the sale by GPH of its insurance operations in Russia, Ukraine, Belarus and Kazakhstan for a total consideration of € 80 million at the closing. The agreement also provides for GPH to pay the shareholders 66% of the profits accrued in 2013 and 2014.
Finally the agreement entails a no-cash equity swap that will see the Generali Group acquire full control of PPF Beta, a fund that holds a 38.46% interest in the Russian insurer Ingosstrakh, while PPF Group will in turn acquire the 27.5% interest held by the Generali Group in the private equity fund manager PPF Partners, which is run by PPF Group, and the PPF Partners 1 Fund L.P. interests held by the Generali Group.
Following the first stage of the transaction PPF Group will retain minority shareholder rights and will appoint two of the eight directors on the board of GPH.