Transition mission in the insurance sector: how does the sale of a subsidiary work?

A parent company may, at any time, choose to sell one of its subsidiaries. To succeed in this delicate operation, calling on an interim manager can be particularly beneficial. How does this transfer of activity take place? What are the challenges? And what are the specificities of such an operation in the insurance sector? WAYDEN answers.

 

Sale of a subsidiary: definition, specificities and challenges

The sale of a company consists of transferring the operation of a structure (in this case, a subsidiary) to a buyer. Very often, the transfer of a subsidiary occurs when the parent company, or subsidiary, is faced with a financial difficulties.

There are also two possible methods of transfer : the sale of company shares and the sale of business assets.

The purpose of the transfer of business assets is to transfer intangible assets (customers, employment contracts, property rights, lease rights, etc.). and materials (furniture, tools, equipment, etc.) that were operated by the subsidiary.

As for the sale of company shares, it refers to the sale of assets (business, premises, buildings owned by the subsidiary) and liabilities (equity – company shares, resources, etc.); debts, etc.).

The group’s manager may also choose to carry out a transitional sale, via one of the following mechanisms: the lease-management of business assets; gradual resumption; merger-absorption; the partial contribution of assets…

Before considering a sale of a subsidiary, it is imperative to identify the need and the degree of urgency of such an operation. The director of the parent company can then follow the following steps to activate the sale of the subsidiary:

1. Carry out a complete inventory of the subsidiary’s economic, fiscal, administrative, material and commercial situation;
2. Carry out an audit of the company’s financial and accounting statement;
3. Notify the various stakeholders (employees, partners, etc.) of the proposed transfer of the subsidiary;
4. Estimate the sale price according to several indicators (market price, annual turnover, profitability, etc.);
5. Look for a buyer and take into account, in its choice, the expertise, skills, experience and references of the latter;
6. Identify the most appropriate tax measures.

 

Why call on an interim manager to manage the sale of a subsidiary in the insurance sector?

Regardless of the sector of activity concerned, the sale of a subsidiary is a complex and very time-consuming project. If it is not carried out rigorously, this operation can have very detrimental financial, legal or tax consequences.

An insurance company, a broker or a large group specialising in the insurance sector may, for example, choose to sell one of its subsidiaries in difficulty. Calling on an interim manager will then be particularly beneficial to secure this complex operation.

Indeed, the insurance sector is highly regulated. Solicit An interim manager who is an expert in the insurance industry allows you to be accompanied by an experienced professional, experienced in the management of large-scale financial and legal operations. Thanks to his perfect understanding of your challenges and your business, the interim manager specialising in insurance will be able to help you manage and secure each step of this delicate operation: audit, choice of buyer, negotiation, etc.

At WAYDEN, we have a pool of nearly 8,000 interim managers. Within this network, we identify a professional specialized in the insurance industry. The latter is equipped with 15 to 25 years of career in strategic positions, unparalleled know-how and managerial skills that will allow him to guarantee a serene and secure sale.