EXOR has agreed to divest reinsurance unit PartnerRe to French mutual insurer Covéa for $9bn in cash.

The move comes nearly two months after the two companies  signed a memorandum of understanding (MoU)  to advance with proposed deal.

A definitive agreement is now signed following the completion of the required consultation with works councils.

In a statement, Exor said: “This transaction with Covéa will reinforce PartnerRe’s development as a great company in its industry thanks to a significant increase in the scale and capital strength that membership of a larger financial institution will bring, and the value that it represents for its clients.”

As agreed, Covéa will pay the consideration at closing. The amount is based on a consolidated common shareholders’ equity value of $7bn.

PartnerRe’s preferred shares listed on the New York Stock Exchange (NYSE) are not part of the deal.

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By GlobalData

The transaction is expected to close sometime in the middle of next year, subject to necessary approvals from regulatory and competition authorities.

Exor and Covéa also agreed to retain their reinsurance cooperation following the completion of the deal. The former will also purchase Covéa’s stakes in special purpose reinsurance vehicles that are managed by PartnerRe for around $725m.

The three entities also agreed to continue investing in Exor-managed funds.

Exor is a diversified holding company incorporated in the Netherlands. It is controlled by the Agnelli family.