Italian insurer Generali takes control of eastern European venture in £2.5bn deal

Italian insurance major Generali SpA (BIT:G) on Tuesday announced a EUR2.52bn (USD3.3bn) deal that would see it take full control of its eastern European joint venture GPH and put an end to its partnership with PPF Group in the region.

Under the terms of the agreement, Generali will buy an initial 25% in GPH by 28 March 2013 for EUR1.29bn and take the remaining 24% at the end of 2014 for EUR1.23bn, it said. Meanwhile, the JV will sell its insurance operations in Russia, Ukraine, Belarus and Kazakhstan, in consumer finance insurance for EUR80m to PPF Group.

Commenting on the transaction, the Italian group’s CEO Mario Greco said it clarifies its strategy for central and eastern Europe, converting it into a top player in this high-growth region. With this move, Generali can fully benefit from its investment and focus on boosting its core insurance operations, while increasing competitiveness and profitability, Greco added.

As soon as the first stage of the transaction closes, Generali will have full management control of GPH, while PPF will have the right to appoint two of the JV’s eight board members. The buyer said it would use proceeds from a bond issue to cover the price for the initial stake.

Goldman Sachs International advised Generali in this transaction, which remains subject to clearance by the relevant authorities.

Reuters cited sources earlier as saying that Generali’s board was to consider the purchase of the stake not yet owned in the JV with PPF.

GPH is active in 14 countries in central and eastern Europe, with gross premiums of EUR4bn at the end of 2011, up from some EUR1bn in 2007. During this period, its client portfolio increased to 14m from four million. The region is Generali’s fourth market after Italy, France and Germany, it said.

Rolls Royce strengthens civil nuclear operations with PKMJ acquisition

British industrial and engineering group Rolls-Royce Holdings Plc (LON:RR) on Tuesday said it had taken over US nuclear engineering services provider PKMJ Technical Services, in a move to grow its global civil nuclear business.

The buyer provided no financial details.

PKMJ offers services and solutions to nuclear utilities in the US and Canada that help manage, enhance and extend the lifetime of nuclear power plants. Its president Paul Tobin sees the deal to ensure a platform for growing its plant optimisation service portfolio, he said in a comment.

Rolls-Royce’s nuclear services business accounts for more than half of its civil nuclear operations. It provides support to operational reactors in 20 countries in Europe, North America and Asia.

The group had underlying revenues of GBP11.3bn (USD18.2bn/EUR14bn) in 2011, with provision of services generating more than half of that amount, it said.

French financial services group Groupama divests private equity arm

French insurance and banking group Groupama SA said it had struck a final deal to sell its investment arm Groupama Private Equity to domestic private equity firm ACG Group for an undisclosed sum.

The transaction has yet to receive regulatory green light, which is seen to occur by the end of the first quarter of this year, Groupama said.

The deal is in line with Groupama’s strategy to shed non-core assets, it said. Groupama Private Equity and ACG will combine complementary competences, the vendor added.

Through the acquisition, ACG will take control of Groupama Private Equity’s funds of funds operation Quartilium and sponsored and sponsorless mezzanine business ActoMezz, which account for EUR1.4bn (USD1.8bn) and EUR200m of managed assets, respectively.

The combination will create a company with some EUR3.5bn of assets under management, ACG’s chairman, Wladimir Mollof, noted.