Private equity firms EQT AB, PAI Partners and Stone Point have been shortlisted in the bidding for German insurance brokerage Global Group, people familiar with the matter said.
Global Group, which is backed by buyout firm Castik Capital, could fetch a valuation of about €2 billion ($2.3 billion) in a sale, one of the people said. Deliberations are ongoing and the companies could still decide against a deal, the people said, asking not to be identified as the information is private.
Representatives for Castik, EQT and PAI declined to comment, while a representative for Stone Point didn’t respond to requests for comment.
Global Group operates in Germany, Austria, Switzerland, and the Netherlands, according to its website. Castik in 2023 acquired a stake in Global Group, which has been acquiring a slew of smaller insurance brokerage firms in recent years.
Photograph: Germany’s stock market index DAX; photo credit: Alex Kraus/Bloomberg
Large was speaking about the U.S. 11th Circuit Court of Appeals’ opinion in National Small Business United vs. the Treasury Department, handed down Dec. 16. A three-judge panel overturned a lower court and found that the federal Corporate Transparency Act (CTA), passed in 2020, is not unconstitutional and can continue to require certain corporations to report the actual people who exercise control over the firms.
“The district court concluded that the CTA did not regulate economic activity and, on that basis, granted the plaintiffs summary judgment. We disagree,” Judge Andrew Brasher wrote for the 11th Circuit panel in the opinion. “We believe that, by effectively prohibiting anonymous business dealings, the CTA facially regulates economic activities having a substantial aggregate impact on interstate commerce. Moreover, as a uniform and limited reporting requirement, the CTA does not facially violate the Fourth Amendment. Accordingly, we reverse.”
The 11th Circuit is the last stop before the U.S. Supreme Court. If the ruling is not appealed and is not reversed by the high court, it would remain U.S. case law, giving at least some support for efforts that aim to discover corporate ownership.
How that information makes its way to the public or to litigants may not be so simple, though. The Transparency Act requires some, but not all, corporations to report ownership information only to the U.S. Treasury. And the Treasury does not have to make it publicly available, according to the department’s Financial Crimes Enforcement Network. The department can release information to state and local agencies engaged in “investigation or enforcement of civil or criminal violations of law,” but only if authorized by a court, FinCen.gov noted.
The Transparency Act also contains multiple exceptions for ownership reporting: Insurance companies, banks, investment companies and nonprofits do not have to report, nor do some larger companies, the court opinion explained.
More state-level disclosure rules are needed, insurance legal insiders said.