American International Group, Inc. (
AIG) is set to purchase all outstanding common shares of Validus Holdings, Ltd. for $5.56 billion in cash.
The acquisition enhances AIG’s general insurance business, adding a leading reinsurance platform, an insurance-linked securities asset manager, a meaningful presence at Lloyd’s and
complementary capabilities in the US crop and excess and surplus (E&S) markets.
“Validus is an excellent
strategic fit for AIG, bringing new businesses and capabilities to our general insurance operation, expanding the bench of our management team and deepening our underwriting expertise,” said Brian Duperreault, president and CEO of AIG.
“With our global scale and the strength of our balance sheet, I am confident that Validus will thrive within AIG and strengthen our ability to deliver profitable growth for our shareholders as we strategically position AIG for the future.”
The deal is said to boost AIG with a diverse and complementary set of attractive franchises across specialized products and regions, including: Validus Re (a treaty reinsurer focused on property catastrophe, marine and specialty); AlphaCat (which manages $3.2 billion insurance-linked assets); Talbot (a Lloyd’s of London short-tail specialty lines syndicate); and Western World (a US specialty property and casualty underwriter).
Holders of Validus common shares will receive cash consideration of $68 per share, for an aggregate transaction value of $5.56 billion, funded by cash on hand. The transaction is expected to be immediately accretive to AIG’s earnings per share and return on equity (ROE). It has been unanimously recommended by the boards of directors of AIG and Validus, and is expected to close mid-2018, subject to approval by Validus shareholders and other customary closing conditions.
“We believe this transaction offers compelling value for our shareholders and reflects the strength of the business we’ve built together with our talented global team,” commented Ed Noonan, Validus’ chairman and CEO. “Joining AIG and becoming part of a larger, more diversified organization immediately opens new opportunities for our people and our franchise. Validus will be able to serve clients and brokers in new and exciting ways, which will enhance our ability to grow profitably.”
Peter Zaffino, AIG’s CEO, general insurance, added: “I have worked with and admired Validus since its formation and have the utmost respect for what the management team has achieved. They have built a business that is highly compatible with AIG’s general insurance business. Brokers and customers of both companies will benefit from this acquisition, and I look forward to all that we will be able to accomplish by bringing Validus into AIG.”
Related stories:
AIG reveals new head of international government affairs
AmWINS announces new CEO and management reshuffle
.jpg)
