The potential sale of troubled Gerling Group to HDI (Haftpflichtverband der Deutschen Industrie V.a.G.) has been called off, just as the sale of Gerling’s reinsurance arm has been given the green light. In a statement, Gerling Group says that after several months of negotiations between HDI and majority shareholders Dr. Rolf Gerling and Deutsche Bank, Gerling Group has cancelled the mutual letter of intent to sell signed last October. “The negotiating parties were unable to reconcile divergent points of view they have of the Gerling Group’s future,” states the release. “Gerling has thus regained the required flexibility to speed up its pursuit of alternative concepts.” Deutsche Bank announced last year its intention to sell its stake in the German insurer, at the same time that a restructuring plan was put in place. That plan involved finding a new “strategic partner”, with Deutshe Bank saying it would sell its entire stake in Gerling to an interested party. Late last week, the path was cleared for Gerling’s reinsurance operations to be sold to a consortium headed by Dr. Achim Kann, with the intention of placing the p&c reinsurance operations in run-off. German regulators had attempted to halt the sale, but a court found that ban had no legal basis. Gerling’s primary operations saw their ratings affirmed by A.M. Best in February, including the Canadian subsidiary, at “A-” (excellent). At that time, A.M. Best said, “the continued uncertainties regarding future ownership of the Gerling Group are not expected to have a negative impact on GKA’s (Gerling-Konzern Allgemeine Versicherungs AG) business profile.” However, at the same time, Standard & Poor’s downgraded the Group’s ratings from A- to BBB on concerns about the impact of the reinsurance operations on overall financial strength.