Mapfre Middlesea plc - Allcare Acquistion

On 27 July, Mapfre Middlesea plc issued an announcement updating the market on the acquisition of Allcare Insurance Limited (Allcare) and its general insurance business portfolio.

Pursuant to the preliminary agreement signed by Mapfre and Allcare back in May 2015, the two parties entered into a Sale of Business Agreement on 24 July by virtue of which Allcare agreed to transfer and sell to Mapfre its economic activity constituting a business as a going concern operated on a stand-alone basis (comprising Allcare’s employees, intellectual property rights, owned or licence software as well as its obligations arising from contracts entered into by Allcare with third party suppliers, service providers, reinsurers and local statutory bodies) with effect from 31 July 2015 (the Completion Date).

On the same day, the two parties also entered into a Portfolio Transfer Agreement (PTA) pursuant to which Allcare is to transfer to Mapfre its general insurance business portfolio as at 1 July 2015 on a going-concern basis.

The transaction, comprising both the Sale of Business Agreement and Portfolio Transfer Agreement are still subject to MFSA approval which is expected to be granted by the Completion Date. Following the completion of the transaction, Allcare is to cease carrying on general business of insurance in or from Malta.

The total consideration payable by Mapfre to Allcare is €1.1 million (payable within seven days of the completion date) as well as a deferred payment of up to a maximum of €0.5 million payable over a three year transitory period.

The announcement also explained that whilst Mapfre will be absorbing all Allcare employees, individuals considered key to running the Allcare business will not be transferred to Mapfre as the Allcare business will be integrated with Mapfre’s existing business and will be managed in accordance with the internal processes adopted by Mapfre and subject to the supervision of Mapfre’s management team. The Directors also noted that with the acquisition of the Allcare business, Mapfre aims to enhance its portfolio of general insurance business particularly in the Motor, Property and Health classes of business.