PARIS/ROME (Reuters) – French bank Credit Agricole on Friday struck a long-term bancassurance partnership with Italy’s Banco BPM (BBPM) and bought some of its assets, strengthening ties with a lender in which it is already the top shareholder.
The deal allows the provision of non-life insurance products and related services through BBPM’s networks for a 20-year period.
It also stipulates that the French bank’s Credit Agricole Assurances (CAA) division will buy from Banco BPM 65% of the share capital of both Vera Assicurazioni and Banco BPM Assicurazioni.
In a separate statement, Banco BPM said the deal valued the two insurance companies 400 million euros ($424.44 million), meaning that Credit Agricole will have to pay 260 million euros for their acquisition.
“We are very pleased that our long-standing strategic partnership with Banco BPM will soon be strengthened,” Credit Agricole CEO Philippe Brassac said in a statement.
“These partnerships further reinforce the rationale of our investment and our long-term commitment to Banco BPM”, he added.
Credit Agricole has a 9.18% stake in Banco BPM, Italy’s third-largest bank behind Intesa Sanpaolo and UniCredit.
Three weeks ago, Banco BPM picked Credit Agricole over a rival bid from French insurer AXA to start exclusive talks over a non-life insurance partnership.
Credit Agricole said the transaction with Banco BPM would have an expected return on investment of more than 10% over 3 years, and a “very limited impact” on its CET1 ratio and its CAA division’s Solvency II ratio.
($1 = 0.9424 euros)
(Reporting by Sudip Kar-Gupta and Alvise Armellini, Editing by Louise Heavens)
