The Italian insurance group Generali expects the global economy to return to pre-pandemic levels this year. It hopes that the many vaccination campaigns will bear fruit to the relief of the global economy. With this in mind, the group intends to launch a takeover bid for Cattolica. Here is everything you need to know about this dossier.
The news made the headlines at the beginning of the week and concerns Italy's leading insurance group. Indeed, Assicurazioni Generali is thinking of a rather impressive launch with the aim of strengthening itself again in the peninsula. It is thinking of launching a €1.17 billion takeover bid for one of its direct competitors, Cattolica.
It is important to note that Generali already owns 24% of Cattolica's capital. In its new perspective, the Italian insurance company will make an offer of 6.75 euros per share. This corresponds to a premium of 15.3% on the closing price of last Friday. The Cattolica share made a gain of 12.63% in mid-morning to 6.82 euros on the Milan Stock Exchange. For its part, Generali gained 0.09% on the stock market.
It should be remembered that during the previous two sessions, Cattolica shares had posted a gain of around 28%.
Note: For the moment, the insurer Cattolica has not yet reacted officially to Generali's project. Generali acquired a stake in Cattolica at the end of last year in an unfavourable market context. At the same time, the supervisory authorities demanded a strengthening of Cattolica's equity capital.
The takeover operation thus initiated is directly in line with the main objective of the Italian company Generali. It will become the sole leader in the field of non-life insurance in Italy. On the other hand, the insurance company will have to work on strengthening its position in the life insurance field. It should be noted in passing that the Bologna-based group Unipol-SAI is currently the undisputed leader in the Italian insurance sector.
At the end of its first quarter, Generali recorded more than 19.7 billion euros in gross written premiums. A figure that indicates a growth of 4.2% compared to the first quarter of the previous year. The insurer achieved a consolidated operating profit of 1.6 billion euros, an increase of 11% compared to Q1/2020.
Net income, meanwhile, rose from €113 million to €802 million, indicating a significant increase of 609%. The lever for this performance is none other than the reduction in the tax rate (61.2% compared to 31.4%).
In addition, the insurance group has confirmed the payment of a cumulative dividend ranging from 4.5 billion to 5 billion euros for the period 2019-2021. The group hopes that there will be no major change in the regulatory environment. It further confirms its annual EPS growth target ranging from 6% to 8% over the 2018-2021 period.