By Eric Sylvers 

MILAN -- Exor NV said on Thursday it signed a memorandum of understanding to sell reinsurance company PartnerRe Ltd. to French insurer Covéa Coopérations for $9 billion, generating a large cash gain that the Agnelli family holding company can direct toward new investments.

Exor, which owns large stakes in car makers Stellantis NV and Ferrari NV, and Covéa reached a similar deal in March 2020, but that fell apart in the wake of the economic distress and uncertainty created by the Covid-19 pandemic. At the time, Exor Chairman John Elkann refused to budge when Covéa argued for a discount on the $9 billion price tag because of the pandemic.

The two sides avoided legal wrangling after the deal fell apart and instead agreed to cooperate in several areas in the insurance market. That cooperation will continue if a final deal is reached, though with Covéa now as the owner of PartnerRe.

"The cooperation agreement signed in the summer of 2020 with Covéa has been positive in many ways and has contributed to a strong level of mutual trust between our companies," Mr. Elkann said.

In recent years, Mr. Elkann has earned a reputation as a deal maker and tough negotiator. When an agreement to merge Fiat Chrysler Automobiles, which was controlled by Exor, with Renault SA fell apart in 2019, he played a key role in finding a new partner for the Italian-American car maker. Fiat Chrysler later merged with PSA Group to create Stellantis, the third-largest car maker in the world by sales.

Mr. Elkann continued to insist on the $9 billion sale price for PartnerRe, something he eventually got. Exor bought PartnerRe in 2015 for $6.9 billion, the largest acquisition in the holding company's diversification away from its reliance on the automobile industry. With its stakes in Stellantis and Ferrari, Exor remains heavily dependent on the vagaries of the auto sector, but it has recently invested in the fashion industry.

The Agnelli family owns 53% of Exor through a holding company controlled by more than 100 descendants of Mr. Elkann's great-great-grandfather who co-founded Fiat at the end of the 19th century.

Exor and Covéa are aiming to have a definitive agreement signed by the end of the year and for the transaction to close by the middle of next year. The deal is subject to consultation with Covéa's worker councils.

PartnerRe's preferred shares listed on the New York Stock Exchange won't be included if a final deal is reached.

Write to Eric Sylvers at eric.sylvers@wsj.com