French bank Natixis has reached an agreement to offload its 29.5% stake in credit insurance company Coface to Arch Capital for €480m ($520m).
Natixis, which became the main shareholder in Coface in 2002, said it is selling the stake for €10.70 per share.
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This represents a discount of around 6% of the company’s closing price on 24 February.
After the deal, Natixis will hold a 12.2% stake in Coface.
Furthermore, the French bank will also lose the place at Coface’s Board of Directors.
Natixis in its press statement said that the deal which would free up 35 basis points for its core equity tier one capital ratio.
It will also generate a one-off goodwill impairment charge of around €100m in Q1 2020.
Arch CEO Marc Grandisson said: “This is a long-term, strategic investment in Coface, and fits with Arch’s efforts to develop uncorrelated sources of underwriting income.
“Our companies share a focus on specialty underwriting where knowledge and expertise create value for our clients, and trade credit contributes to Arch’s specialty-driven business model.”
Grandisson added: “We support Coface’s management team and are aligned with their strategic plan.”
Coface offers adapted risk prevention, monitoring and protection services.
The French firm, which was established in 1946 as a specialist in export credit insurance, employs nearly 4,300 people across 66 countries.
Subject to antitrust and regulatory approvals, the deal is expected to conclude within one year.
