The completion of this transaction, valued at $3.3 billion, marks a strategic move that aims to generate both immediate and long-term value for RenaissanceRe shareholders.
The acquisition, initially announced in May and later approved by the European Commission in August, encompasses Validus Reinsurance Ltd., its consolidated subsidiaries, and AlphaCat Managers Ltd. Additionally, RenaissanceRe gains all renewal rights to the assumed reinsurance treaty unit of Talbot as part of the deal.
AIG, in retaining Talbot Underwriting and Western World, received a consideration of $3.3 billion in cash, inclusive of a pre-closing dividend, and approximately $275 million in RenaissanceRe common shares. This transaction underscores RenaissanceRe’s commitment to enhancing its reinsurance capabilities and expanding its market presence.
In the acquisition process, RenaissanceRe received legal counsel and integration consulting services from Sidley Austin LLP and Oxbow Partners, respectively. On the other hand, AIG enlisted the financial advisory services of Evercore Group L.L.C. and J.P. Morgan Securities LLC, with legal counsel provided by Wachtell, Lipton, Rosen & Katz and Debevoise & Plimpton LLP.
Speaking about the acquisition, Kevin J. O’Donnell, President and Chief Executive Officer of RenRe, said: “We are delighted to complete the Validus Re acquisition today. We are bringing together two of the best reinsurance underwriters and look forward to the risk expertise and scale that our combined company will bring to our customers.”
“This transaction accelerates our strategy, expands our ability to match efficient capital to desirable risk, and positively impacts each of our three drivers of profit – underwriting, fee, and investment income. We are pleased to extend our partnership with AIG and have strong conviction that this transaction will create both immediate and long-term value for our shareholders,” he added.
Author: Joanna England
