• MAPFRE will control of 100 percent of BB MAPFRE’s Non-Life business
• BB MAPFRE will focus on Life, agriculture and homeowners insurance
• MAPFRE will control 100 percent of the Life business developed via the agency channel (currently 25 percent)
• The bank channel distribution agreement is to be maintained, selling MAPFRE products exclusively
• These combined transactions have a floor price of 2,406 million reales (546 million euros)
MAPFRE and BANCO DO BRASIL have reached full agreement, signed today, on updating their strategic alliance in the insurance business, which gave rise to BB MAPFRE, incorporated in May 2010, and which over the course of the last eight years has consolidated itself as one of the leading insurance groups in Brazil.
The new agreement will facilitate both the redefinition of the businesses developed by BB MAPFRE and progress toward a more simple and efficient governance structure in those businesses that are jointly managed, which will result in reduced internal costs, with significantly improved productivity and business profitability.
According to the terms of the agreement, MAPFRE will own 100 percent of BB MAPFRE’s Non-Life business, (currently 50 percent), which includes business coming from both the agency channel and automobile and large risks insurance from the bank channel, in addition to the Life business related to products distributed via the agency channel.
BB MAPFRE will continue selling, as it has done up to now, Life and agriculture insurance via the bank channel, as well as Mortgage Life insurance.
These combined transactions have a floor price of 2,406 million reales (546 million euros at current exchange rates), which is subject to adjustment in line with the meeting of automobile insurance distribution targets in the BB bank channel and the dividends that will be paid out to shareholders up to when the transaction is closed.
Antonio Huertas, chairman and CEO of MAPFRE, explained that “this new configuration of the agreement will allow us to renew our alliance with Banco do Brasil, enlarge MAPFRE’s business in the country, maintain exclusivity for our products in the Banco do Brasil channel, and organize our local businesses in a much simpler and more efficient manner”, adding that “this agreement is clear proof of our complete confidence in Brazil’s economic development, and our commitment to both the country and our future with our partner”.