Travelers Buys Brazil Insurance

Travelers, the US property and casualty insurer, will acquire a 43% stake in J. Malucelli Participacoes from parent company Parana Banco for $370m. Parana will continue to hold 57% of the surety insurance subsidiary, though Travelers has the option to increase its stake to 49.9% within 18 months for the same price it paid for its initial stake, indexed to CDI. The deal implies a pre-money valuation of BRL925m for the unit, according to a spokesman. Greenhill advised Travelers, while Malucelli used BTG Pactual, the spokesman adds. According to the company, Travelers’ investment in newly issued shares will significantly increase J. Malucelli’s capital level, allowing it to fund further expansion. Management at Malucelli will stay in place, though Travelers will take several board seats, according to an investor conference call.