A year ago, Italy's largest insurer Generali entered into a strategic partnership with rival Cattolica, and today the partners are preparing for a deal in which well-known consultants will enter the arena. At the moment, it is not yet known who will become a consultant, although according to a Reuters report the leaders in the role of M&A consultant for Cattolica are Goldman Sachs and KPMG, and who may take this position for Generali is not yet clear. Well, now let's look at some details.

Cattolica Insurance Group is one of the leading players in the Italian insurance market, the company was founded in 1896. The Group has a client base of 3.5 million customers and 1,360 agencies located throughout Italy and an agency base of 1,851 agents (www.cattolica.it).

Generali, founded in 1831, is one of the largest global players in insurance and asset management, with a client base of 65.9 million customers and more than 72,000 employees worldwide. The Group is present in 50 countries and holds leading positions in Europe, increasingly strengthening its presence in the markets of Asia and Latin America. In 2020 premium income was more than 70.7 billion euros (www.generali.com).

As noted by Consultancy.eu experts, the economic crisis caused by COVID-19 has had an impact on the solvency of Cattolica, which required the company to raise funds of about 500 million euro last year. Italy's largest insurer Generali raised the necessary capital and suspended 24.4% of Cattolica's shares (Consultancy.eu).

The strategic partnership agreement was approved by the Board of Directors of Cattolica and Generali last year and was based on three key principles, among them, such as mutually beneficial agreements in four strategic areas - asset management, Internet of Things, medical business and reinsurance; as well as an increase in the share capital of Cattolica and the transformation of its structure.

Thus, KPMG previously advised Cattolica and represented it in the strategic partnership agreement, and Attorney Mario Cera also acted as a consultant to the insurance group. As a result, the structure of the insurance company was changed from a cooperative organization to a joint stock company. As for Generali, Rothschild & Co acted as financial advisor to the insurance company and Gianni Origoni Grippo & Partners and Tremonti & Associati acted as legal advisors.

As noted by Bloomberg experts, Generali is now preparing to buy Cattolica with a €1.2 billion offer to buy out the remaining shares, offering investors €6.75 per share. Generali values Cattolica at 1.5 billion euros, and the offer represents a 15% premium to the last closing price (www.bloomberg.com).

The partnership with the competitor gave Generali the opportunity to offer Cattolica's 3.5 million customers its high-tech asset management, health insurance and reinsurance services. In addition, Generali, which seeks to dominate, thanks to the deal may become the first in the non-life insurance market and strengthen its presence in the life insurance market.

Consultancy.eu experts expect that Cattolica will again ask KPMG for support, but there is still no information about who will advise Generali (Consultancy.eu).