Garrigues Spain advises Caixa Catalunya on the sale of its insurance business to Mapfre

Garrigues Spain has advised Caixa Catalunya, the fifth largest savings bank in Spain by volume of assets, on the EUR 556.8 million sale of half of its insurance business to leading Spanish insurer, Mapfre.

Under the deal, which was completed on March 5, Caixa Catalunya and Mapfre will jointly develop the savings bank’s solid insurance and pension business. More specifically, Mapfre will acquire 50 percent of Caixa Catalunya’s subsidiaries that offer insurance services throughout Iberia

The transaction was finalized after a long competitive selection process that saw important Europeans insurers bidding alongside Mapfre. The maximum price that Mapfre will pay to Caixa Catalunya amounts to EUR 556.8 million, where 446.8 will be paid in installments between 2010 and 2015 and the remaining EUR 110 million will be paid provided that the venture reaches a number of specified business goals.

Garrigues team was led by Ramón Girbau and Naiara Bueno on the M&A side and Ignacio Calvet on the tax side. “The process is of the utmost interest, as Caixa Catalunya is currently part of the first merger process in course among Spanish savings banks (cajas de ahorros), in a transaction that involves Caixa Tarragona and Caixa Manresa to give raise to the Spanish third savings bank,” says M&A partner Ramón Girbau. “Both Caixa Tarragona and Caixa Manresa are expected to follow the same track by means of their own bancassurance deals with Mapfre, the three deals to be consolidated eventually in the life and non-life insurance businesses of the financial entity resulting from the merger of the three banks.”

Caixa Catalunya’s subsidiaries (Ascat Vida and Ascat Seguros Generales) registered a turnover of EUR 1.12billion in 2009 (20.8 percent more than in 2008) coming from insurance premium sales, and EUR 3.9 billion of managed savings (10.6 percent up from last year). This is the largest M&A transaction carried out in the last months in Spain and the third most important transaction in the Spanish bancassurance sector, after Criteria’s acquisition of Adeslas and Zurich’s purchase of 50% of Banco Sabadell’s insurance business.

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Garrigues is one of the top Continental European legal services firms, both in terms of billings and number of fee earners. The Firm, which provides full advisory services, has the largest network of offices in Spain has its own offices in London, New York, Brussels, Lisbon, Oporto, Bucharest, Warsaw, Casablanca, Tangiers and Shanghai.