Spanish insurance firm Mapfre has reached an agreement with CaixaBank to offload its stake in Bankia’s insurance arm for around €571m.

CaixaBank stated that it agreed to pay €323.7m for MAPFRE’s 51% stake in Bankia Vida. The deal will give CaixaBank 100% control over the life insurer’s share capital.

The Spanish lender will also pay the remaining €247m to MAPFRE as part of the compensation agreement to terminate the agency contract to distribute non-life insurance.

MAPFRE stated that the €571m deal represents a lower intrinsic value of Bankia’s business.

Both the parties have agreed to start an arbitration procedure, which may increase the deal value by €52m, thereby taking the final price to around €623m.

MAPFRE noted that the deal represents a profit of around €171m.

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The proceeds will be used to upgrade MAPFRE’s operating model in Spain. About €100m will be allocated for a voluntary retirement programme to be carried out in the next two years.

MAPFRE will also have funds to digitise its Italian operations and optimise its financial structure.

In September 2020, CaixaBank agreed to acquire its local rival Bankia. Last month, the Spanish lender concluded the technological and operational integration of Bankia.

CaixaBank stated that the deal will have no significant impact on its accounts in the 2021 fiscal year.

The bank added that its 49% stake in the life insurer resulted in an income of €29m from March 2021.