FILE PHOTO: A view shows the company logo of Caixa Economica Federal bank in downtown Rio de Janeiro August 20, 2014. REUTERS/Pilar Olivares
SAO PAULO (Reuters) – France’s CNP Assurances SA (CNPP.PA) is close to reaching a deal worth 7 billion reais ($1.7 billion) with Brazil’s state-owned lender Caixa Economica Federal [CEF.UL] to sell insurance in the bank’s more than 3,000 branches, two sources with knowledge of the matter said.
The companies will create a joint venture with Caixa insurance unit Caixa Seguridade holding a 60% stake and CNP owning the rest.
The deal involves life, pension plans and consumer credit life insurance to be sold through 2046, one of the sources added.
The agreement is likely to be announced in the coming hours.
Caixa and CNP Assurances did not immediately respond to requests for comment.
One year ago, both financial institutions had agreed to create a similar joint-venture, but CNP would pay 4.65 billion reais for a contract to sell life insurance products through 2041. This deal has been revised under new terms, the sources said.
The new joint venture will start to operate in 2021, when the current agreement will expire.
Morgan Stanley is advising Caixa to forge partnerships for its insurance units, including this renegotiation with CNP. JP Morgan Chase is advising CNP Assurances.
Reporting by Carolina Mandl; Editing by Lisa Shumaker