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. Last Updated: 07/27/2016

Generali Nets INA in Italian Deal




MILAN, Italy -- Italian insurer Generali seized control of smaller rival INA on Tuesday at the climax of a two-month campaign to beef up its domestic market and strengthen its position as Europe's third largest insurer.


The Milan bourse said INA shareholders had offered 80.6 percent of the company in exchange for Generali stock and cash by the time the bid closed, wrapping up the biggest takeover yet seen in Italy's fast-growing insurance sector.


Generali's successful takeover of INA gives the insurer, already Italy's largest, 33 percent of Italy's life insurance business and 19 percent of its non-life market.


In addition to leading the market in Italy, with a 26 percent market share overall, Generali will be second in Austria, second in Spain, third in Germany and sixth in France.


The Trieste-based insurer ranks third in Europe behind Germany's Allianz and Axa of France but until now has earned the biggest single share of premiums on Allianz's home turf in Germany.


"By any standards this is an overwhelming vote of confidence from the market for Generali's bid and its strategy," a source close to the company said.


Generali has a shareholding in Italy's largest bank, Banca Intesa, following Intesa's takeover of Banca Commerciale Italiana, or BCI. Generali was a core BCI shareholder. Generali CEO Gianfranco Gutty and Chairman Alfonso Desiata have seats on Intesa's board.


Intesa has inherited BCI's link with Germany's Commerzbank, which was a key shareholder. The German bank is also a key ally of Generali as well as its third largest shareholder, further strengthening ties between Generali and Banca Intesa.


Banca Intesa has strong links in France, where Credit Agricole is its largest shareholder with 26.7 percent.


And Generali's biggest single shareholder, merchant bank Mediobanca, has a strong market position in Italy. Moreover, Generali's successful bid neutralizes a threat to its domination of the Italian market that was being mounted by Turin-based Sanpaolo IMI f ensuring that Generali and its allies maintain a central role in Italy's financial system.


INA's board abandoned hopes of a white-knight rescue by Sanpaolo in the autumn after Sanpaolo and Generali came to an agreement to carve up INA's banking assets between them, telling its shareholders to accept the cash-paper bid from Generali.