Italy’s largest bank, Intesa Sanpaolo has signed an agreement to acquire a controlling stake in RBM, a family-owned health insurer in a transaction valued at about €300m ($332.9m), Reuters reported.
Intesa Sanpaolo, which was formed in January 2007 out of the merger of Banca Intesa and Sanpaolo IMI, has been working on strengthening its insurance business to bolster its balance sheet.
In terms of the number of branches, Intesa Sanpaolo is the largest bank in Italy. Through the deal, the lender wants to ward off the effect of negative interest rates that have made lending loss-making.
According to Reuters, the transaction is the first step by the Italian bank towards the complete takeover of RBM.
Under the plans, Intesa SanPaolo will snap up the majority stake in the third-largest health insurer in Italy by July 2020.
Subsequently, the Italian banking group will gradually raise its shareholding between 2026 and 2029 to entirely capture the whole of RBM.
The final purchase price will be determined once the company hits the set growth targets.
Branded as Intesa Sanpaolo RBM Salute, the new insurance firm will have a market share of approximately 21%. It will be able to underwrite €600m in premiums in the health insurance business.
Separately, Intesa Sanpaolo has agreed to divest its retailers’ payment business to Nexi in a deal worth €1bn.