Generali Raises Projected Profit Boost From Purchase of Cattolica
Generali now expects to achieve pre-tax synergies of 120-130 million euros ($127-$137 million) by 2025 from the takeover of Cattolica, compared to a target of 80 million euros by 2026 set at the time of its buyout offer.
Generali paid around 1.2 billion euros to buy Cattolica, which is based in Italy’s wealthy north east like Generali itself, in a move that strengthened its domestic leadership.
The integration process “is proceeding swiftly and effectively, confirming the clear and compelling strategic rationale presented at the time of the offer,” the company said in a statement.
Generali sees an additional contribution of 0.4 percentage points from Cattolica to its earnings per share in terms of 2021-24 compound average growth rate (CAGR).
Generali also detailed the effect from new accounting standards, dubbed IFRS 17 and IFRS 9, saying they would significantly improve the visibility of profits in Generali’s life business while having no impact on cash and capital generation, net holding cash flow, dividends or solvency.
Generali said its operating result is expected to remain “broadly stable” under the new standards. Also its shareholders equity is expected to be “broadly stable” compared to the level at the end of 2021. ($1 = 0.9480 euros)
(Reporting by Gianluca Semeraro; editing by Cristina Carlevaro and Valentina Za)