Fiat's Agnelli Family Sees $9 Billion Sale of Insurance Business Falter
By Eric Sylvers and Ben Dummett
The coronavirus pandemic sank its second-biggest corporate deal
of the year -- the proposed $9 billion sale of a reinsurance
business by Exor NV, the holding company of Italy's Agnelli family,
which also controls Fiat Chrysler Automobiles NV.
French insurer Covéa Coopérations agreed to buy the reinsurer,
PartnerRe, from Exor in early March. When the two sides announced
the deal, the coronavirus was just beginning to spread in
Several other companies have rethought big deals in recent
weeks, in some cases retrenching and seeking to protect liquidity
during the severe economic crisis precipitated by the pandemic.
Xerox Holdings Corp. abandoned its more than $30 billion bid to buy
larger rival HP Inc.
L Brands Inc. and Sycamore Partners scrapped their plans to take
Victoria's Secret private, dropping a deal reached just weeks
before the coronavirus pandemic forced the lingerie retailer to
temporarily shut its stores.
On Tuesday, Exor said Covéa had tried to renegotiate the terms
of the deal and then backed out. The holding company said the
deal's memorandum of understanding didn't have a clause allowing
the agreement to be shelved in the case of a pandemic.
Covéa said in a statement: "In light of the current
unprecedented conditions and significant uncertainties threatening
the global economic outlook, Covéa has indicated to Exor that the
context does not allow the contemplated acquisition of PartnerRe to
be carried out on the terms initially envisaged." A Covea
spokeswoman couldn't immediately be reached for comment.
John Elkann, the Agnelli scion who is chairman and chief
executive of Exor, hadn't been looking to sell PartnerRe, but
agreed because he said a favorable price had been offered. Exor,
which owns 29% of Fiat Chrysler, agreed to buy PartnerRe in 2015
for $6.9 billion. It was the holding company's largest acquisition
in its multiyear diversification away from its reliance on the
The deal's collapse comes as fallout from the pandemic has
highlighted the increasing risks Exor faces in its bigger bet to
create an auto giant through the planned merger of Fiat Chrysler
and Peugeot maker PSA Group. Both sides said as recently as last
week that they remain committed to the tie-up, but some analysts
and investors are less certain about the math behind the deal.
The current terms call for the Italian-American car maker to
make a EUR5.5 billion, or about $6 billion, cash payout to Fiat
Chrysler shareholders at a time when Fiat and other car makers have
scrambled to save and raise cash. ((link:
SoftBank Group Corp. moved in March to back out of a deal to buy
$3 billion worth of shares in WeWork's parent company from
investors and former and current employees. The Japanese
conglomerate cited various reasons including regulatory probes,
though not the virus. A special board committee at the
shared-office-space company sued SoftBank for breach of contract in
April, and the two sides are set to face off in trial early next
Late last month, Boeing Co. said it had dropped plans to take
control of the jetliner business of Brazil's Embraer SA, saving
around $4 billion in much-needed cash. Boeing said the companies
failed to agree to final terms by the initial termination date and
opted to walk away from the two's planned joint ventures, announced
Write to Eric Sylvers at email@example.com and Ben Dummett at
(END) Dow Jones Newswires
May 12, 2020 16:38 ET (20:38 GMT)
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