Generali Agrees to Acquire Liberty Mutual’s European Units for $2.5 Billion

Assicurazioni Generali SpA has agreed to acquire a group of European businesses from US insurer Liberty Mutual Holding Co. for €2.3 billion ($2.5 billion), as part of its plan to expand in non-life insurance.

Liberty Mutual announced the sale of its Liberty Seguros subsidiary in a statement on Thursday that confirmed an earlier Bloomberg News report. Generali beat out other large European insurers to acquire the asset, which includes businesses in Spain and Portugal, Ireland and Northern Ireland.

“Generali is acquiring a profitable insurance business in three growing European markets with very attractive characteristics, that will create significant long term value for all stakeholders,” Generali Chief Executive Officer Philippe Donnet said in a statement.

Generali is seeking to improve profitability by focusing on more lucrative assets, and expanding in casualty and property business and asset management. Donnet has outlined plans to return as much as €5.6 billion in dividends to investors by 2024 and repeatedly said he’s ready to catch mergers and acquisitions opportunities if they arise.

Last year, he explored a deal to buy US investment firm Guggenheim Partners’ asset management business. The plan was later put on hold.

Liberty Mutual sells everything from property and casualty to life insurance in Spain and Portugal through agents, banks and affiliates, according to its website. It entered Ireland through an acquisition in 2011 and offers personal car and home insurance there, as well as business products.

The company is exiting non-core markets and looking to bulk up in US property and casualty insurance. It sold some European life operations to Dutch insurer NN Group NV in 2021 and has also been exploring a sale of its Latin America businesses.

“This decision further helps Liberty Mutual sharpen our operational focus to deliver exceptional value across our channels, products and markets,” Liberty Mutual CEO Tim Sweeney said in Thursday’s statement.

Liberty Seguros employs about 1,700 staff across western Europe and had premiums of €1.2 billion in 2022. The acquisition will make Generali one of the top players in the Spanish insurance industry and will see it enter the property and casualty market in Ireland for the first time.

Christian Badorff, a vice president at Moody’s Investors Service, said the deal is in line with Generali’s ambitions to expand in Spain and Portugal and will further shift its earnings base to non-life underwriting. Including the latest smaller acquisitions, Generali has now made full use of its planned budget for M&A in the 2022-24 period, Badorff said.

Bank of America Corp. advised Liberty Mutual on the disposal, while Citigroup Inc. and Credit Suisse Group AG worked with Generali.

Photograph: An Assicurazioni Generali SpA logo sits above an entrance to its offices in Rome, Italy, on Friday, Jan. 27, 2017. Photo credit: Alessia Pierdomenico/Bloomberg