Zurich and Banco Sabadell sign agreement

by Richard Kilner

Story link: Zurich and Banco Sabadell sign agreement

Zurich Financial Services Group has signed an agreement with Banco Sabadell S.A. which gives Zurich a 50% stake in Sabadell’s life insurance, pension and general insurance operations.

The deal also marks a long-term strategic partnership in the field of distribution, and means that Zurich will now become the second largest insurer in Spain.

Zurich will take management control of the companies involved (BanSabadell Vida S.A. de Seguros y Reaseguros (BanSabadell Vida), BanSabadell Pensiones E.G.F.P., S.A., and BanSabadell Seguros Generales, S.A. de Seguros y Reaseguros (BanSabadell Seguros Generales)) and fully consolidate them.

However, Sabadell will retain a 50% stake, and remains committed to jointly advancing the insurance operations.

James J. Schiro, Zurich’s chief executive officer, has stated that the move is in line with the firm’s intention for a multi-distribution strategy and that it is always planned to increase its presence in Spain.

The purchase price of life insurance and pensions amounts to US$1,020m, with an additional earn-out component of up to US$188m.

The purchase price of the general insurance company comes to around US$157m, with an earn-out component of US$47m.