Cinven sells Ergo Assicurazioni to Darag
European specialty insurer, DARAG, announced it has agreed to acquire ERGO Assicurazioni S.p.A from ERGO Italia S.p.A, the Italian insurance consolidator.
This acquisition is subject to the authorization of the Italian insurance Regulator, IVASS, and will be DARAG´s first transaction in Italy and a milestone for its growth strategy in Europe. The consideration for the transaction has not been disclosed. ERGO Assicurazioni was part of the ERGO Italia Group sold by German insurance group, ERGO Group, in 2015, a transaction approved by IVASS.
ERGO Assicurazioni’s portfolio is well diversified and includes all major retail non-life personal line products. Once authorized by IVASS, ERGO Assicurazioni will be renamed DARAG Italia S.p.A and will become the third strategic insurance company within the DARAG Group and a platform for DARAG´s activities in Southern Europe. DARAG intends to continue to develop ERGO Assicurazioni´s current line of business as well as establish a second pillar, run-off operations, with the purpose of ensuring continuity and creating leeway for ERGO Assicurazioni’s further sustainable development.
“Italy is a very attractive market, ranking number five in Europe in terms of gross written premiums. Through ERGO Assicurazioni, we can leverage the expertise and professionalism of our new Italian colleagues who are already well positioned in the Italian insurance market today”, says Arndt Gossmann, Group CEO of DARAG. “By adding run-off solutions to the existing lines of business, ERGO Assicurazioni can also spearhead the introduction of highly efficient capital management instruments in the Italian market.”
KPMG Italy was among the advisors on the transaction, advising DARAG.
Partner, Global Co-Head FS M&A, KPMG Corporate Finance
Cinven sold Ergo Assicurazioni to Darag – what was your specific role in the transaction?
We advised DARAG as exclusive financial advisor
What prompted the acquisition?
Deep knowledge of both the technicalities of the industry and the regulatory framework made possible to prompt the acquisition.
What were the challenges, if any, of bringing the transaction to completion?
In Italy, this was the first ever acquisition that involved a run off specialized player acquiring an Insurance company. Furthermore, the transaction was a back-to-back acquisition, i.e. CINVEN acquiring from ERGO and then selling it to DARAG, the NON Life business.