Insurance giant Zurich, has entered into a Scheme Implementation Agreement (SIA) with Cover-More Group Limited (Cover-More) to acquire Cover-More, an ASX listed provider of travel insurance provider.
Under the transaction, Zurich will acquire 100% of the issued share capital of Cover-More for AUD 1.95 cash per share, with the scheme consideration valuing Cover-More’s fully diluted equity at approximately AUD 741 million (USD 554 million). The proposed acquisition of Cover-More fits Zurich’s aspiration to develop a distinct position in the global travel insurance market. Cover-More represents a unique opportunity for Zurich to acquire a globally expanding platform, deployable across Zurich’s footprint.
Rajbir Nanra, Chief Executive Officer of Zurich’s property and casualty business in Australia and New Zealand said: “The proposed acquisition of Cover-More, which operates globally and is based in Sydney, will see Zurich further strengthening its position and demonstrates its commitment to the Australian market. This acquisition will open up opportunities to explore how we can collaborate with Cover-More to support our local plans in Australia to diversify our product and distribution offering, while staying true to our intermediated broker focus.”
“This reflects the strategic value of Cover-More’s business including its strong market position, global distribution footprint and its ability to deliver growth into the future,” said Cover-More chairman Louis Carroll.
CEO Mike Emmett believes CoverMore will be well positioned to accelerate growth in the global travel insurance market with access to Zurich’s global platform.
“This is an acknowledgement of our expanding global footprint, specialist travel insurance capability and market-leading partnerships in key markets,” he said.
— Travel Daily (@travel_daily) December 11, 2016
“The proposed acquisition is an excellent fit with Zurich’s strategy for its retail business and should create significant value for the Group. It will further strengthen our position and expertise in the global travel insurance market and support our ambition to expand our distribution partnerships. Through Cover-More’s technology platform, Zurich will be able to attract and serve the needs of retail customers in the growing travel insurance market,” added Jack Howell, Zurich’s Chief Executive Officer of Asia Pacific. “We look forward to welcoming Cover-More into the Zurich Group.”
Both parties are working towards implementing the Scheme no later than in the second quarter of 2017 and it is proposed that, under Zurich ownership, Cover-More will continue to operate as a standalone entity and will retain its brand.