February 25, 2020 / 8:12 AM / a month ago

UPDATE 1-France's Natixis sells 29.5% of Coface to Arch Capital in $520 mln deal

(Adds details, background)

PARIS, Feb 25 (Reuters) - French bank Natixis said on Tuesday it had agreed to sell a 29.5% stake in credit insurance company Coface to U.S. company Arch Capital Group, in a deal valued at around 480 million euros ($520 million).

Natixis said it was selling the Coface stake for 10.70 euros per share, a discount of around 6% to Coface’s 11.38 euro closing price on Feb. 24.

France’s fourth largest listed bank will hold 12.2% of Coface after the sale, which would free up 35 basis points for Natixis’ core equity tier one capital ratio but generate a one-off goodwill impairment charge of around 100 million euros in the first quarter of 2020.

“Following the completion of the transaction, Natixis will continue to demonstrate its commitment to shareholder return with the distribution of all excess capital above target through ordinary dividends or other means,” it said in a statement.

Natixis, which will no longer be represented on Coface’s board of directors, said the closing of the deal would take between six and 12 months.

Coface, which Natixis had listed on the Paris stock market in 2014, said it was raising its financial targets.

Natixis was one of the French banks hardest hit by the crisis in 2007, when the collapse of bonds backed by poor quality mortgages spread through financial markets. It eventually had to be rescued by its parent bank, BPCE.

Coface provides credit insurance to protect companies against potential non-payment by customers. It also offers debt collection, factoring and market research services. ($1 = 0.9223 euros) (Reporting by Sudip Kar-Gupta and Benoît Van Overstraeten; editing by Jason Neely and Alexander Smith)

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