Generali to return up to 6.1 bln euros to investors under new plan

The logo of insurance company Generali is seen on the company headquarters in Budapest, Hungary, November 29, 2019. Picture taken November 29, 2019. REUTERS/Tamas Kaszas/File Photo

MILAN, Dec 15 (Reuters) – Italy’s biggest insurer Generali (GASI.MI) said on Wednesday it would return up to 6.1 billion euros ($7 billion) to shareholders by 2024 in dividends and with its first buyback in 15 years as Chief Executive Philippe Donnet seeks reappointment.

Donnet, who is seeking to extend his term in April amid opposition to his strategy from two major shareholders, also earmarked up to 3 billion euros for mergers and acquisitions (M&A) in insurance and asset management.

“M&A remains a tool to accelerate value creation for shareholders,” he told a news briefing.

He said Generali was looking at Europe and Asia to expand its insurance and asset management businesses. The United States and Britain were also being looked at as areas to expand asset management, he added.

In his previous M&A plan, Donnet spent 85% of the 4 billion euro M&A war chest, which critics considered too timid.

Generali said it targeted an average earnings per share growth of 6%-8% a year under the new plan.

The company aimed to boost premiums in non-motor property and casualty by more than 4% a year on average in 2021-2024, it said, adding that it targeted small businesses and senior care in Europe and travel insurance in the United States.

Donnet’s strategy won 11 votes out of 13 on Generali’s board, two sources close to the matter said late on Tuesday.

Generali’s second-largest shareholder, Italian magnate Francesco Gaetano Caltagirone, voted against, while a representative for Leonardo Del Vecchio, another top investor, did not attend the meeting, the sources said.

Caltagirone and Del Vecchio, the billionaire founder of eyewear giant Luxottica, have challenged Donnet’s leadership and his reappointment in April which is backed by a majority of board members and Generali’s biggest investor Mediobanca (MDBI.MI).

Caltagirone could not immediately be reached for comment.

($1 = 0.8875 euros)

Reporting by Gianluca Semeraro; Editing by Valentina Za and Edmund Blair

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