(Alliance News) - Assicurazioni Generali Spa announced Thursday that it has reached an agreement with Liberty Mutual to acquire Liberty Seguros, Compañia de Seguros y Reaseguros, SA, a Spanish insurance company operating in Spain, Portugal, Ireland and Northern Ireland.

"The transaction, consistent with the "Lifetime Partner 24: Driving Growth" strategic plan, will allow the group to grow further, increase the development of its non-life business and strengthen its leadership in Europe. Thanks to this transaction, Generali will achieve its fourth position in the Non-Life business in Spain and consolidate its second position in Portugal," the company explained in a note.

"Generali will enter Ireland, placing it among the top ten companies in an attractive and profitable market, further expanding the group's presence in Europe. These countries offer a significant growth opportunity for the group due to the lower insurance penetration of these markets compared to comparable European markets. From the transaction, the group expects to generate economies of scale through cost reduction, optimization of IT systems, cross-selling of Generali products, and also through the group's proven track record in integrations. Liberty Seguros' digital distribution skills represent an important accelerator for the development of the group's strategic initiative related to a multi-country platform for the direct channel."

The total consideration for the transaction is EUR2.3 billion, including the entire excess capital of Liberty Seguros, subject to adjustment at closing. The estimated impact on the group's Solvency ratio is minus 9.7 percent.

Liberty Seguros has a strong capital position, with a Solvency ratio above 330 percent as of December 31, 2022.

With more than EUR1.2 billion in premiums written in 2022, Liberty Seguros is a company focused primarily on non-life, with a growing motor business and a diversified product mix, about 1,700 employees and 5,600 brokers in the three markets in which it is active. The company operates through agents, brokers and direct channels, as well as distribution agreements and bancassurance partnerships.

Generali trades down 0.3 percent at EUR18.87 per share.

By Claudia Cavaliere, Alliance News reporter

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