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Covea-PartnerRe ranks among largest Bermudian deals in dollar terms

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The $9bn takeover deal of PartnerRe by Covea is the second largest in dollar terms for a Bermudian carrier in the last 10 years but is low-to-mid ranking in terms of multiple, data work by Insurance Insider shows.

Yesterday, PartnerRe-owner Exor and Covea announced the agreement, which revives a deal that collapsed at the height of the pandemic.

Covea first agreed to buy PartnerRe in March 2020, which would have meant Covea paying $9bn cash for the Bermudian reinsurer.

However, the takeover deal was scrapped last May after the French mutual attempted to renegotiate terms due to the impact of Covid-19 and was rejected by the Agnelli family investment firm.

Comparing the Covea-PartnerRe deal with other recent Bermudian M&A deals shows the $9bn consideration is the second highest in dollar terms, only behind the $15.3bn deal for XL Catlin by Axa in 2018.

However, on a book value multiple, it ranks far lower and is closer to the valuation secured by Sirius when it was acquired by Third Point Re last year.

Select bermudian multiples table october 29 2021.PNG

The 1.25x multiple for PartnerRe is at a premium to the trading multiples of most of its Bermuda-listed peers, with Arch the only carrier to be trading at a higher 1.3x price-to-book multiple.

Bermudian trading multiples table October 29 2021.PNG

As this publication has previous said, Exor’s decision to re-engage – and ultimately sign – with Covea demonstrates the paucity of options available to it to exit the PartnerRe investment.

Covea has long been seeking a reinsurance platform, and it pursued Scor before turning its attentions to PartnerRe.

Following the collapse of the first incarnation of the PartnerRe deal, Covea also held talks with Axa about acquiring Axa XL Re.

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