Mutua Madrileña and El Corte Inglés close their strategic alliance for operating jointly in the insurance market

Mutua Madrileña and El Corte Inglés closed their strategic alliance today, having obtained all the pertinent authorisations. The agreement implies the sale of the El Corte Inglés insurance business to Mutua Madrileña, specifically the sale of a 50.01% interest in each of its two insurance companies, SECI and CESS. In addition, Mutua is taking a direct shareholding in El Corte Inglés.

The transaction, agreed and announced last October, was sealed this morning, having obtained all the required authorisations, including those of Spain’s insurance sector watchdog, the DGSFP, and its anti-trust authority, the CNMC. In tandem, El Corte Inglés has taken receipt of the corresponding payments: €550m for the insurance business and €555m for 8% of El Corte Inglés’ shares.

Corporate governance

Under the terms of the agreements reached, Ignacio Garralda, chairman and CEO of Grupo Mutua, will take a seat on El Corte Inglés’ Board of Directors and Javier Mira, managing director of Grupo Mutua and executive chairman of SegurCaixa Adeslas, will chair SECI and CESS. Jaime Aguirre de Cárcer, until now deputy managing director of Mutua Madrileña’s insurance business, will serve as director and CEO of both companies.

The new board of SECI will be made up of nine professionals. It will be chaired by Javier Mira and will be made up of four representatives of Mutua Madrileña, three from El Corte Inglés and two independent directors. In addition to Javier Mira, who will chair SECI’s board, Mutua Madrileña will be represented by Jaime Aguirre de Cárcer, as director and CEO, Tristán Pasqual del Pobil and Víctor Zambrana.

On behalf of El Corte Inglés, the new board will include Javier Rodríguez-Arias, Santiago Bau and José María Folache. Gonzalo Ulloa, honorary president of law firm Gómez-Acebo & Pombo, and Juan Zabía, managing partner at law firm Zabía Abogados, will join the board as independent directors.

Turning to CESS, the board of directors will be made up of six members, with its chairman, Javier Mira, having the casting vote. Mutua Madrileña will also be represented on CESS’ board by Jaime Aguirre de Cárcer, as director and CEO, and Juan Manuel Granados, while El Corte Inglés will be represented by Javier Rodríguez-Arias, José María Folache and Santiago Bau.

Thanks to this transaction, Grupo Mutua will become El Corte Inglés’ exclusive supplier of insurance and savings products from 1 June. The current portfolio, and prevailing terms and conditions, therefore, remain unchanged. CESS, the retail group’s former insurance broker, is converting to an insurance agency tied to Mutua Madrileña in order to market the alliance’s insurance products.

In terms of distribution of the alliance’s savings products, within the next few weeks, Mutua Madrileña and El Corte Inglés are going to set up the securities brokerage that will market the investment and pension funds of Mutuactivos, as well as third-party products, with the aim of enhancing the breadth of financial products and wealth management advisory services offered to El Corte Inglés’ customers. The newco, in which Grupo Mutua will hold a 50.01% interest and El Corte Inglés, the remaining 49.99%, is expected to start to do business during the first quarter of 2023.

Major strategic agreement

This strategic alliance will allow Grupo Mutua expand its distribution channels and access El Corte Inglés’ extensive customer base, currently reached through over 2,000 points of sale in Spain, Portugal and other international locations. The retail group's stores receive over 700 million in-person visits a year and its online channels around 500 million visits, making it one of Spain's largest online retailers. The agreement provides El Corte Inglés’ customers with a better and more comprehensive and personalised insurance offering.

The agreement also marks a significant milestone in execution of El Corte Inglés’ Strategic Plan. In recent months the retail group has completed a number of important transactions on both the business and corporate fronts in order to boost its execution.

Mutua Madrileña's decision to make an equity investment in El Corte Inglés bolsters the relationship and cooperation between the two Spanish firms, which have customer service excellence and customer journey track records in common. Both groups intend to retain all their staff.