France's BNP Paribas and Belgian insurer Fortis will take a majority stake in the non-life insurance unit of Italy's UBI Banca, the buyers announced on Thursday.
Fortis and BNP Paribas Assurance would take 50 percent plus one share of UBI Assicurazioni, a provider of property and casualty insurance in Italy, from UBI Banca.
Fortis and BNP would pay 120 million euros ($177.1 million) in cash on completion of the deal. It could make a further payment of about 40 million euros depending on future business.
The transaction will be executed by a holding company, F&B Insurance Holdings. Fortis would have a 50 percent plus one share stake, BNP Paribas Assurance 50 percent minus one share.
The buyers said they would build on UBI Assicurazioni's non-life products, which would continue to be distributed through UBI Banca, a top five Italian bank.
UBI said it saw a 45 million euro capital gain from the deal, with a positive impact on its core Tier-1 ratio of about 10 basis points.
The transaction is expected to close before the end of 2009.
BNP Paribas is already present in the Italian market. Fortis, left as a pure insurer after its carve-up by the Dutch and Belgian states, has a scattering of insurance operations outside its Belgian core.
(Reporting by Philip Blenkinsop; editing by Simon Jessop)