Insurance powerhouse Generali is reportedly intensifying its cost-cutting drive in an attempt to stay independent and deter a potential takeover by Italian banking giant Intesa Sanpaolo.
Generali announced in November 2016 that it will restructure and simplify operations in mature markets to reduce costs by €200 million, which is reportedly 4% of the company’s cost base.
The publication, which cited sources familiar with Generali’s thinking, noted that the figure was still “well short” of proposed radical cuts of up to 20% made by some advisers.
According to the report, Generali is already working on plans to announce its new cost cuts next month.
The supposed plan to slash more costs is Generali’s latest move against the takeover bid of Intesa, which confirmed in January that it was examining “possible industrial combinations” with the insurer.
Generali also previously acquired a 3% stake in Intesa to fend off unwanted interest from the bank. The insurer likewise reportedly planned to get a second adviser to shore up its defences.
While Generali was raising its guard, Intesa chief executive Carlo Messina recently met with many of the bank’s biggest investors to discuss the planned deal with Generali, The Financial Times reported.
According to the publication, Messina told investors that he was seeking a “friendly merger” and that he wanted to approach both Generali and its core investors. He also said that he would announce by the end of February if an offer for the major insurer will push through.
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