Cleary Gottlieb represented CNP Assurances in the negotiation of a binding framework agreement providing for the establishment of a new long-term exclusive distribution agreement in Brazil until February 2041 in the network of Caixa Econômica Federal (CEF).
The new exclusivity perimeter in CEF’s network includes life insurance, consumer credit life insurance, and private pension plans (vida, prestamista, previdência). The new distribution agreement will be implemented through a newly formed insurance joint venture between CNP Assurances and Caixa Seguridade, the holding company for CEF’s insurance operations, with CNP Assurances and Caixa Seguridade owning respectively 51 percent and 49 percent of the voting rights and 40 percent and 60 percent of the economic rights.
CNP will continue holding its 51.75 percent interest equity in Caixa Seguros Holding S.A. (CSH), the existing joint venture with Caixa Seguridade, which will keep all its existing activities in Brazil distributed outside of the CEF network. Cleary and Mattos Filho also assisted CNP Assurances with the required amendments to the existing joint venture to reflect the new arrangements.
As part of the agreement, CNP Assurances agreed to pay a fixed amount of R$ 4.65 billion (approximately $1.15 billion) on the closing date. The closing of the transaction is subject to a number of condition precedents, including in particular its approval by the relevant regulatory and competition authorities.
CNP Assurances is a French insurance company. CEF is one of the leading Brazilian banks and one of the five largest in Latin America.