After obtaining all necessary authorizations, Mutua Madrilena was able to close the strategic alliance process with El Corte Ingles on Tuesday. The agreement includes the sale of El Corte Ingles’ insurance business, which comprises 50.01% each of the companies that perform said activity: SECI, CESS, as well as the entry of Mutua in the shareholding of El Corte English, a capital representing 8% of department store sales.
According to sources, Marta Alvarez, chair of the company, will use 1,105 million euros to pay off debt. El Corte Ingles redeems a 690 million Euro bond it issued in Ireland in Oct 2018 that matured in 2024. It also settles the 390 Million Euro loan from the ICO Line, requested during the pandemic. The group’s debt will still be just above 2,500 million euros, its lowest level for the past 15 years.
Mutua Madrilena’s entry in El Corte Ingles’ capital reinforces the bond and cooperation between the Spanish companies. They share the same values of excellence in customer service and exceptional customer experience. Both companies envision 100% employment.
After obtaining all necessary administrative authorizations from both the General Directorate of Insurance and Pension Funds – DGSFP – and the National Commission of Markets and Competition – the operation, which was announced and agreed to last October, has been initiated. The corresponding payments were made simultaneously: 550 million to the insurance business, and 555 millions for the 8% share in El Corte Ingles’ capital.
Ignacio Garralda is now Chairman and CEO of Mutua Group. Javier Mira, General Manager at Mutua Group and Executive Chair of SegurCaixa Adeslas will be chairing SECI and CESS. Jaime Aguirre de Carcer will be the director-general manager for these two companies. He was previously deputy general manager at Mutua Madrilena’s Insurance Area.
The Mutua Group, as the sole provider of El Corte Ingles insurance and savings products, will be able to take over this operation effective Wednesday, June 1. Therefore, the current portfolio will remain unchanged and in the same conditions. CESS, an ex-insurance broker for the department store group, will become an insurance agency linked with Mutua Madrilena in order to market the products of the alliance.
In the next weeks, Mutua Madrilena will establish the securities agency to market Mutuactivos’ investment funds and pension plans. This will help improve and expand the financial products and asset advisory services to El Corte Ingles clients. The Mutua Group will own 50.01%, El Corte Ingles 49.99%. This new company is expected to begin operations in the first quarter 2023.
Mutua Group will be able to expand its distribution channels and reach the large customer base at El Corte Ingles. El Corte Ingles currently has over 2,000 sales points in Spain, Portugal, and other countries. Its centers are visited by more than 700 million people each year, and it receives over 500 million visitors through its online channels. This makes it one of the most popular online sellers in Spain. This agreement will allow El Corte Ingles to offer its customers a more comprehensive, personalized and customized insurance plan.
The operation is a crucial step in the execution the Strategic Plan El Corte Ingles. To boost its business, the distribution group has undertaken important corporate and commercial operations in recent months.
The new SECI board of directors will consist of nine members. Javier Mira will chair the new board of directors. It will include four representatives from Mutua madrilena, three El Corte Ingles members and two independents. Jaime Aguirre de Carcer will serve as director-general manager. Victor Zambrana and Tristan Pasqual del Pobil will also be there on behalf of Mutua Madrilena.
The Council will be composed of Javier Rodriguez-Arias Santiago Bau, Jose Maria Folache, and Santiago Bau on behalf of El Corte Ingles. Gonzalo Ulloa is honorary president of Gomez-Acebo
CESS’s board of directors will consist of six members, with Javier Mira as its president casting the vote. Mutua Madrilena, as director-general manager, will also be represented. Juan Manuel Granados and Javier Rodriguez-Arias will represent El Corte Ingles. Jose Maria Folache, Santiago Bau, and Jose Maria Folache will represent El Corte Ingles.
