June 25, 2020 / 5:28 AM / 11 days ago

Italy's Generali agrees to buy 24.4% stake in rival Cattolica

MILAN, June 25 (Reuters) - Italy’s top insurer Generali will buy a 24.4% stake in smaller rival Cattolica Assicurazione for 300 million euros ($337.41 million) in a deal that will boost Cattolica’s finances amid the coronavirus crisis, the companies said.

Cattolica will also launch a cash call for up to 200 million euros ($224.94 million), which Generali has the option to subscribe on a pro-rata basis, they said in a joint statement on Thursday.

Under the agreement with Generali, cooperative insurer Cattolica will have to transform into a joint stock company.

Italy’s insurance regulator last month told Cattolica to raise 500 million euros ($562.35 million) after the coronavirus crisis knocked its solvency ratio, a measure of financial strength.

Warren Buffett’s Berkshire Hathaway is currently Cattolica’s top investor with a 9% stake. ($1 = 0.8891 euros) (Reporting by Elvira Pollina; Editing by Muralikumar Anantharaman)

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