Assicurazioni Generali SpA is analyzing a range of potential takeover candidates as part of the insurer’s growth plans, with some of them worth more than €10 billion ($10.9 billion), according to people familiar with the matter.
The Italian insurer would only consider friendly deals and on its wish list are more than half-a-dozen firms, including large ones such as Aviva Plc and smaller rivals like Uniqa Insurance Group, the people said, asking for anonymity to discuss non-public information. Italy’s biggest insurer has for instance studied the possible merits of a deal with NN Group NV, a Dutch insurer with a market value of about €11 billion.
Generali, which has a market capitalization of almost €35 billion, would only contemplate targets with a price tag of up to half its own stock value, according to the people. It held informal discussions at very high level with some potential targets, though they haven’t led to formal talks and there are currently no live negotiations under way, the people said.
A spokeswoman for Generali declined to comment.
Chief Executive Officer Philippe Donnet, who is expected to unveil a new set of financial targets by the end of the year, has long balanced investments in growth with shareholder payouts. Since taking the helm in 2016, he has strengthened Generali’s finances, cut costs and expanded into more lucrative product areas while cementing the firm’s presence in its home market and abroad through a string of acquisitions.
Last year, the firm agreed to acquire a group of European businesses from US insurer Liberty Mutual Holding Co. for €2.3 billion and Cathay Life unit Conning Holdings Ltd.
The current takeover planning is focused on Generali’s core European markets and is considering mainly share-based deals, rather than cash. Other targets on its radar include Aegon Ltd, Ageas SA, Baloise Holding AG, Ergo Group, Mapfre SA and Vienna Insurance Group AG, the people said.
Donnet, 63, said this week that Generali may increase its dividend and consider a share buyback on an annual basis as part of his next strategic plan. The CEO pledged to return as much as €5.6 billion to shareholders through dividends in the period 2022 to 2024.
Photograph: Philippe Donnet, chief executive officer of Assicurazioni Generali SpA, poses for photograph on Wednesday, Oct. 2, 2019. Photo credit: Alessia Pierdomenico/Bloomberg
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