UPDATE 2-Banco BPM takes full ownership of insurance JV with Cattolica

(Adds Cattolica statement)

MILAN, Dec 15 (Reuters) – Italy’s Banco BPM said on Tuesday it would end an insurance partnership with Cattolica by acquiring full control of their joint-ventures, in a move that may ease a mooted tie-up with BPER Banca.

Banco BPM said it would exercise a call option to buy the 65% stakes held by Cattolica in their Vera Vita and Vera Assicurazione joint-ventures for an outlay of 335.7 million euros ($408 million).

Three sources familiar with the matter told Reuters last week that Banco BPM, Italy’s third-largest bank, was considering a tie-up with smaller rival BPER, whose top investor is insurer UnipolSAI.

The sources had said UnipolSAI eyed Banco BPM’s bigger distribution network, rooted in Milan’s wealthy Lombardy region, betting Banco BPM could dissolve the partnership with Cattolica.

Italy’s third-largest bank said in a statement a change of control at its business partner had prompted it to break up the JVs.

Italy’s biggest insurer Generali in June agreed to buy 24.4% of Cattolica, leapfrogging Warren Buffett’s Berkshire Hathaway to become the single largest investor in the Verona-based insurer.

Banco BPM said Cattolica challenged the view that a change of control had taken place.

Cattolica said in a note that the position taken by Banco BPM is “completely groundless” and it reserves the right to act to protect its interests.

Banco BPM in 2018 struck a 15-year insurance partnership with Cattolica after selling a majority stake in another insurance JV for 850 million euros.

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