HDI International to Acquire Retail Insurance Business of Sompo Seguros in Brazil & More News Here

HDI International AG, a subsidiary of Talanx Group, is buying the retail enterprise of Sompo Seguros S.A. in Brazil.

This acquisition permits HDI Seguros S.A. in Brazil to acquire scale in motor and to diversify into non-motor property/casualty and life safety companies. HDI can even strengthen its market place in Brazil, reaching quantity seven in the P/C market and quantity 4 in the motor insurance coverage market.

The preliminary buy value cost is topic to sure closing account and different changes and is predicted to quantity to roughly 1.1 billion Brazilian actual ($228.2 million). It could also be adjusted up or down primarily based on sure performance-based standards post-closing. From the monetary yr 2023 onwards, the transaction is predicted to be earnings accretive.

The transaction is predicted to shut in the center of 2023.

Under the phrases of the deal, Sompo Seguros S.A. agreed to spin off its client enterprise into a brand new insurance coverage subsidiary and promote the shares of the brand new firm to HDI Seguros S.A.

“In a consolidating market, scale and diversification become more and more important. This acquisition enables us to continue our success story in Brazil which is the largest insurance market in Latin America with significant profitable growth potential in the mid- and long-term,” commented Dr. Wilm Langenbach, board member of Talanx AG, answerable for the worldwide retail enterprise and CEO of HDI International AG.

HDI Seguros S.A. in Brazil will develop by round 1.8 billion Brazilian actual ($373.5 million) to roughly 5.5 billion Brazilian actual ($1.1 billion) in gross written premiums.

“The acquisition in our core market Brazil strengthens our market position in some key regions in Brazil, especially in São Paulo, the country’s largest city, and diversifies our portfolio into life protection as well as gaining scale in residential and property,” mentioned Nicolas Masjuan, head of LatAm at HDI International AG. “Furthermore, we are able to achieve significant synergies by combining Sompo´s retail business with our existing business in Brazil.”

Sompo Seguros S.A. is an element of the Sompo Holdings Group, based in 1943. The firm operates in retail insurance coverage and industrial traces. As half of a strategic reorientation on the commercial traces phase in Brazil, Sompo Seguros S.A. will spin off the retail enterprise into a brand new firm and switch the brand new firm to HDI.

The retail enterprise at present includes 22 department workplaces situated all through Brazil, with a related focus in São Paulo. The former retail enterprise of Sompo Seguros ranks among the many nation’s prime 10 motor insurers.

Following a transitional interval, the enterprise shall be continued beneath HDI’s model.

“This strategic change supports Sompo International’s goals of expanding in new and existing geographies, delivering a consistent market approach across all lines of business and strengthening the strategic alignment across Sompo International geographies globally,” mentioned Sompo International in an announcement.

HDI International AG already has a presence in Brazil via HDI Seguros S.A. with a give attention to the motor insurance coverage market. With its workforce of greater than 1,300 staff, the corporate generated a premium quantity in 2021 of round BRL 3.7 billion ($767.8 million).

The Talanx Industrial Lines division additionally operates in Brazil via HDI Global Seguros S.A. The mixed entities of Talanx would convey the group shut to a prime 5 place in the Brazilian P/C market.

Talanx intends to finance the transaction from current liquid funds. This transaction is topic to the approval of the accountable supervisory authorities.

Source: HDI and Sompo International

Topics
Mergers & Acquisitions

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