By Matteo Castia
Ageas NV said Wednesday that it has sold its 50.1% stake in Tesco Underwriting Ltd. to British grocer Tesco PLC's banking business Tesco Personal Finance PLC.
The Belgian insurer said Tesco Bank will pay a consideration of 104 million pounds ($134.5 million) plus Ageas's part of any change in the net asset value realized by Tesco Underwriting from June 30 until deal completion, which is expected in the second quarter of next year.
Additionally, Ageas will receive a reimbursement of an internal loan for an amount of GBP21 million, it said.
Tesco Underwriting is a U.K.-based nonlife joint venture between Ageas's U.K. business and Tesco Bank, providing motor and household insurance to the U.K. market. The partnership was set up in 2009 and was extended for seven more years at the end of 2014.
"The transaction is expected to generate a capital gain of approximately 9 million euros [$10.6 million] and to have a positive impact of around 3% on Ageas's solvency position," Ageas said.
For Ageas' part, Tesco Underwriting had a book value of EUR100 million as of June 30 and generated a net profit of EUR13 million in 2019.
Write to Matteo Castia at email@example.com
(END) Dow Jones Newswires