Arch Capital Group to obtain minority stake in Coface

Bermuda-headquartered re/insurer Arch Capital Group has entered into a share purchase agreement with corporate investment banking company Natixis regarding the acquisition of a 29.5 percent stake in Coface, a France-based trade credit insurer.

The transaction will be completed at a price of €10.70 ($11.6) per share, corresponding to a transaction value of approximately €480 million based on the current number of shares.

Marc Grandisson, Arch’s chief executive officer, said: “This is a long-term, strategic investment in Coface, and fits with Arch’s efforts to develop uncorrelated sources of underwriting income. Our companies share a focus on specialty underwriting where knowledge and expertise create value for our clients, and trade credit contributes to Arch’s specialty-driven business model. We support Coface’s management team and are aligned with their strategic plan.”

As part of the transaction, Natixis’ seven representatives on Coface’s board of directors will resign and be replaced by four Arch nominees. This will result in the majority of Coface’s board members being independent. Coface has indicated that it will seek a new independent board member and will appoint a chairman of the board from among the independent board members.

There are no anticipated impacts on Coface’s or Arch’s employees resulting from the proposed transaction. Arch has indicated that it does not intend to seek control of Coface for a period of 12 months after the closing of the transaction.

The transaction remains subject to antitrust and regulatory approvals, including in particular, approval by the French prudential regulator, the Autorité de Controle Prudentiel et de Résolution (ACPR).