AIG to acquire Validus in $5.56bn deal
American International Group has agreed to buy Bermudian reinsurer Validus Holdings in a deal worth $5.56 billion.
The US company’s offer of $68 per share represents a 45.5 per cent premium to Validus’s closing stock price on Friday.
AIG said the deal, expected to close in mid-2018, will also boost AIG’s management talent, underwriting business and insurance-linked securities capabilities.
In a joint statement released today, Brian Duperreault, chief executive officer of AIG, and Ed Noonan, chairman and CEO of Validus, appeared to indicate that Validus would continue much as it does today and would remain in Bermuda.
“Because our companies are highly complementary, after closing we expect there to be minimal integration and that Validus will operate largely as it does today but within General Insurance at AIG,” the two CEOs stated.
“Clients and brokers can expect the same responsive, solutions-driven approach to which they are accustomed. And, at AIG, we look forward to being more closely connected to Bermuda once again through Validus’s strong presence here.”
Apart from its Bermudian-based reinsurance operation, Validus also owns Lloyd’s underwriter Talbot, US insurer Western World and alternative capital manager AlphaCat.
The boards of both companies have approved the transaction.
Mr Noonan said: “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.
“Joining AIG and becoming part of a larger, more diversified organisation 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.”
Mr Duperreault said: “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.
“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.”
Peter Zaffino, CEO of AIG’s General Insurance segment, said: “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.”
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