UPDATE 1-Generali sells Mexican assets to Banorte for $858 mln
By Lisa Jucca
MILAN, June 11 (Reuters) - Generali SpA Chief Executive Officer Mario Greco took another step towards meeting a 4 billion euro ($5.3 billion)disposal target, agreeing to sell out of two Mexican companies for $858 million.
The Italian insurer said it would bag a net capital gain of 500 million euros from the sale of 49 percent stakes in Seguros Banorte Generali, the larger or the two assets, and Pensiones Banorte Generali to Grupo Financiero Banorte, Mexico's No.4 bank.
Banorte already owned the remaining 51 percent in the pair.
"We seized Banorte's offer at the best conditions for us and withdrew from a minority position which was no longer consistent with Generali's current strategy," Greco said in a statement, adding that Latin America, particurlarly Brazil, remained a very attractive market.
The disposal will also add 4 percentage points to Generali's Solvency 1 ratio, a closely-watched regulatory measure of capital strength, the Trieste-based group said.
With the sale, Generali has raised 2.2 billion euros from disposals, more than half its planned target. Earlier this year Greco pledged to raise 4 billion euros from non-core asset sales by 2015 as he pushes through a plan to shore up capital and restore value.
Generali a week ago sold its U.S. reinsurance business to France's Scor for a total $920 million.
Europe's third-largest insurer is also seeking to dispose of its private bank BSI, which some potential buyers think it is worth less that its 2.3 billion Swiss franc ($2.4 billion) book value.
A source close to the talks told Reuters that the sale of BSI, even if delivered below book value, is expected to add 10 percentage points to Generali's Solvency 1 ratio.
Generali has been undergoing a radical transformation since Greco took office just under a year ago, replacing long-standing CEO Giovanni Perissinotto.