CNP Assurances (CNP) and Barclays Bank PLC (Barclays) have agreed to enter into a 25 year business alliance to develop life insurance through Barclays networks in Spain, Portugal and Italy.

The partners enter into an exclusive distribution agreement for life and pension products including savings, pensions and risk business lines, distributed through Barclays retail networks in Spain, Portugal and Italy.

 Barclays and CNP share the common ambition of setting up a strong life insurance franchise in Spain,Portugal and Italy capitalizing on the proven track record and fast growing presence of Barclays in these countries (some 1 000 branches at end 2008) and on the growth potential of Southern Europe insurance markets.

As a result of this agreement, CNP will pay Barclays an initial upfront consideration of €140 million in cash on completion. This is subject to a post-completion adjustment by reference to BVP’s net assets as at closing. An additional consideration potentially leading to a substantial amount will be payable to Barclays in cash over a period of 12 years, dependent upon achieving certain volume and margin thresholds and Barclays branch openings, to maintain a balanced sharing of the value created through the joint venture between the two shareholders.

This self-financed transaction won’t have any material impact on CNP Assurances Solvency ratio. The transaction is conditional on receipt of the necessary regulatory approvals.

Gilles Benoist, Group Chief Officer of CNP Assurances, said “We are delighted to launch this partnership with such a highly regarded bank as Barclays. CNP’s long standing experience and expertise in life insurance, particularly in Southern Europe, combined with the growth capacity of Barclays in this region will create long term value for all parties. Moreover, this partnership refocuses and strengthens CNP’s footprint in the region, and will be source of positive synergies.”