HDI Worldwide AG, a subsidiary of Talanx Group, is buying the retail enterprise of Sompo Seguros S.A. in Brazil.
This acquisition permits HDI Seguros S.A. in Brazil to achieve scale in motor and to diversify into non-motor property/casualty and life safety companies. HDI may also strengthen its market place in Brazil, reaching quantity seven within the P/C market and quantity 4 within the motor insurance coverage market.
The preliminary buy value fee is topic to sure closing account and different changes and is anticipated to quantity to roughly 1.1 billion Brazilian actual ($228.2 million). It might be adjusted up or down based mostly on sure performance-based standards post-closing. From the monetary yr 2023 onwards, the transaction is anticipated to be earnings accretive.
The transaction is anticipated to shut in the course of 2023.
Beneath the phrases of the deal, Sompo Seguros S.A. agreed to spin off its shopper enterprise into a brand new insurance coverage subsidiary and promote the shares of the brand new firm to HDI Seguros S.A.
“In a consolidating market, scale and diversification grow to be increasingly necessary. This acquisition permits us to proceed our success story in Brazil which is the most important insurance coverage market in Latin America with important worthwhile progress potential within the mid- and long-term,” commented Dr. Wilm Langenbach, board member of Talanx AG, liable for the worldwide retail enterprise and CEO of HDI Worldwide AG.
HDI Seguros S.A. in Brazil will develop by round 1.8 billion Brazilian actual ($373.5 million) to roughly 5.5 billion Brazilian actual ($1.1 billion) in gross written premiums.
“The acquisition in our core market Brazil strengthens our market place in some key areas in Brazil, particularly in São Paulo, the nation’s largest metropolis, and diversifies our portfolio into life safety in addition to gaining scale in residential and property,” mentioned Nicolas Masjuan, head of LatAm at HDI Worldwide AG. “Moreover, we’re capable of obtain important synergies by combining Sompo´s retail enterprise with our present enterprise in Brazil.”
Sompo Seguros S.A. is a part of the Sompo Holdings Group, based in 1943. The corporate operates in retail insurance coverage and industrial traces. As a part of a strategic reorientation on the commercial traces phase in Brazil, Sompo Seguros S.A. will spin off the retail enterprise into a brand new firm and switch the brand new firm to HDI.
The retail enterprise presently contains 22 department places of work situated all through Brazil, with a related focus in São Paulo. The previous retail enterprise of Sompo Seguros ranks among the many nation’s high 10 motor insurers.
Following a transitional interval, the enterprise shall be continued beneath HDI’s model.
“This strategic change helps Sompo Worldwide’s objectives of increasing in new and present geographies, delivering a constant market method throughout all traces of enterprise and strengthening the strategic alignment throughout Sompo Worldwide geographies globally,” mentioned Sompo Worldwide in an announcement.
HDI Worldwide AG already has a presence in Brazil via HDI Seguros S.A. with a give attention to the motor insurance coverage market. With its workforce of greater than 1,300 workers, the corporate generated a premium quantity in 2021 of round BRL 3.7 billion ($767.8 million).
The Talanx Industrial Strains division additionally operates in Brazil via HDI World Seguros S.A. The mixed entities of Talanx would convey the group near a high 5 place within the Brazilian P/C market.
Talanx intends to finance the transaction from present liquid funds. This transaction is topic to the approval of the accountable supervisory authorities.
Supply: HDI and Sompo Worldwide
Mergers & Acquisitions
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