Corporate Financier’s Notes
by Aivars Jurcans
Done! And Done
Covea, a French insurer, has signed a memorandum of understanding to buy PartnerRe, a Bermuda-based reinsurer (which is controlled by Agnelli family), in an all-cash deal for USD 9 billion. Exor, an Agnelli family company, bought PartnerRe 5 years ago for USD 6.9 billion.
Capital Group, a US asset manager, has built a 4.8% stake in Commerzbank, a German lender, becoming its 4th largest shareholder after the German government, Cerberus and BlackRock. Capital Group has close to USD 2 trillion of assets under management and holds a 3.1% stake in Deutsche Bank as well.
Deals On The Table
Bank of East Asia, a Hong Kong-based family-run bank, is said to undertake a strategic review that may result in a sale of “large parts of it”. The bank is controlled by the Li family, despite it holding only 7% of shares.
Credit Agricole, a French bank, is said to be exploring a potential sale of its consumer finance business in the Netherlands. It offers online loans and other forms of consumer credit in the Netherlands under brands including Interbank, Findio and KredietDesk.
Ninety One, the asset management arm of Investec (a South African banking group), has set an IPO price range that implies a market capitalisation of between GBP 1.75 billion and GBP 2.17 billion.
ING Groep, a Dutch lender, is said to be considering selling ING Bank AS, its Istanbul-based Turkish business (the 12th largest of the country’s 47 banks). ING entered Turkey by acquiring Oyakbank for USD 2.7 billion in 2007. Its Turkish loans make up about 1.5% of ING’s total loan book.
Skin In The Game
Hendrik du Toit, the CEO of Ninety One, is said to own a 1.92% stake in the company which could be worth up to GBP 41.7 million after the float.
Metrics To Watch
AIA’s, a Hong Kong-listed insurer, shares are still trading at 17x times forward earnings, a premium of more than 1/3 to its global peers.
Standard Chartered, a London-based emerging markets-focused lender, return on tangible equity was 4.8% in 2019, a 3 percentage point increase since 2017, but far below the target level of 10%.
Follow The Money
Banco Santander Brasil has agreed to sell Superdigital, its financial startup, to a European subsidiary of Banco Santander, a Spanish lender, for USD 61.53 million. Superdigital (which offers virtual wallets) has 1.9 million accounts.
JPMorgan’s annual technology budget exceeds USD 11 billion.
Ant Financial, a Chinese mobile payments company, has taken “a small stake” (under 1%) in Klarna, a Swedish fintech. Klarna which handles payments for 200,000 merchants around the world and had revenues of USD 740 million last year was valued at USD 5.5 billion in 2019.
The ratio of global debt to GDP hit an all-time high of over 322% in Q3 2019, with total debt reaching close to USD 253 trillion, according to the Institute of International Finance.
Announced M&A deals involving asset and wealth managers fell by 1/2 to USD 13.5 billion in 2019, according to Piper Sandler. The assets moving between managers dropped by 2/3 to USD 1.3 trillion in 2019, the lowest since 2010.
A Thought Worth Noting
“When I speak to US investors, they invest in US banks, not in a bank of the state of New York or the state of California. When they look at Europe, they invest in an Italian bank – UniCredit of course – but also in a German bank, a French bank. They don’t look at European banks.”
Jean Pierre Mustier, CEO. UniCredit
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Aivars Jurcans has more than 20 years of corporate finance and investment banking experience. His services are currently available through MURINUS ADVISERS.