French mutual insurer Covéa has scrapped its planned $9bn acquisition of the Bermuda-based reinsurer PartnerRe from EXOR.

The French insurer said that it could no longer purchase PartnerRe according to agreed terms in the wake of market dislocation caused by the ongoing Covid-19 pandemic.

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Reportedly, risk related to Covid-19 pandemic had been excluded from the deal’s ‘material adverse change’ (MAC) clauses of a memorandum of understanding (MoU) signed by the companies earlier this year regarding the acquisition of PartnerRe in its entirety.

Last month, Covéa cancelled its earlier plan to buy property and casualty reinsurer SCOR saying that ‘a transaction with SCOR is no longer part of its strategic options’.

Meanwhile, Exor has acknowledged Covéa’s decision not to finalise the agreement.

In a separate statement, Exor said: “In attempting to renegotiate the agreed deal terms, Covéa has never suggested the existence of a material adverse change, including pandemic risk, or any other issues at PartnerRe that would explain its refusal to honour its commitments under the MOU and Exor believes that no such basis exists.”

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Exor also noted that PartnerRe possess one of the highest capital and liquidity ratios in the global reinsurance industry and is not expected to be significantly affected by the pandemic outbreak.

The Board therefore reiterated its strong belief that a sale of PartnerRe on terms inferior to those established in the MOU fails to reflect the value of the Company, it said.

Exor will now retain ownership of the PartnerRe.