Mutua Madrileña Takes 8% Of El Corte Inglés And Seals An Agreement In Insurance

Strategic alliance between Grupo Mutua and El Corte Inglés that goes beyond the agreement in the distribution of insurance and investment funds that they were negotiating. The firm chaired by Ignacio Garralda has acquired an 8% stake in the capital of the department stores, from the treasury stock of the company chaired by Marta Álvarez , for a value of 555 million euros , which will give entry to the insurance group in its board of directors.

This relationship is further consolidated, as advanced by the Economist , through an agreement whereby Grupo Mutua will acquire 50.01% of each of the two companies that carry out the insurance activity of El Corte Inglés, that is, SECI (Insurance of Life and Accidents) and CESS (Insurance Brokerage) for an amount of 550 million euros.

In this way, Mutua will become the exclusive provider of both life and non-life insurance, as well as investment funds for the distribution group. And CESS will become a linked agency to sell only Mutua’s products under the Seguros El Corte Inglés brand.

Regarding the asset management activity, Mutuactivos will exclusively distribute its portfolio of savings and investment products among the El Corte Inglés customer base through all the distribution group’s commercial channels and networks.

The shareholding of El Corte Inglés has thus undergone three major changes in recent years. The first of these occurred in 2015 when Sheikh Hamad Bin Jassim Bin Jaber Al Thani, through PrimeFin , granted the department store group a loan that was convertible into shares over a three-year term for a value of 1,000 million. Already in 2018, it was left with 10% of the capital, so the company was valued at 10 billion euros.

At the end of 2020, El Corte Inglés repurchased shares from its employees in order to obtain up to 4% of the capital. The valuation that was given to the company at the time is, according to knowledgeable sources, close to the one now produced with this Grupo Mutua operation.

This same year, between the months of January and February, there was another important shareholder movement. Dimas Gimeno and his mother, Maria Antonia Alvarez, sold in extremis actions of department stores owned indirectly through Securities Portfolio IASA . After solving the family confrontation that for years had conditioned the management of the company, Gimeno and Álvarez received 145 million euros for their 5% of the shares. This gave, despite the special circumstances in which the operation was carried out, a company value of 2,900 million euros .

The operation, pending administrative authorizations, which was announced this Thursday, gives El Corte Inglés a valuation of 6,937 million euros. This movement allows the insurance group to add more than 2,000 points of sale with a presence in most of Spain, Portugal and in various international locations. Its centers receive more than 700 million face-to-face visits per year and some 500 million visits through its online channels, which makes it one of the largest online sellers in Spain.

As advisers to the operation, Société Générale and Garrigues, on behalf of Mutua, and Goldman Sachs, Uría and KPMG , the latter as co-adviser for insurance, on behalf of El Corte Inglés. In addition, there has been additional intervention from Bank of America and Deloitte .

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