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Amlin in $5.3bn sale to Japanese firm

Island presence: Amlin has its Bermuda office in the ten-storey office building at 141 Front Street. Japan's MS&AD Insurance Group Holdings has agreed to buy London-based Amlin for $5.3 billion

Barely has the dust settled on the last consolidation deal among insurers and reinsurers, than another one has been agreed.

This time it is Lloyd’s of London insurer Amlin that is the acquisition, after Tokyo-based MS&AD Insurance Group Holdings yesterday agreed to buy the company for $5.3 billion.

Amlin is headquartered in London, but set up a reinsurance office in Bermuda in 2005 and also has a presence in Zurich.

Before the Amlin buyout was announced, there had globally been about $81 billion in deals involving insurers this year.

Following news of the deal, Amlin shares surged by 33 per cent on the London Stock Exchange, closing at 655 pence.

Mitsui Sumitomo Insurance Company (MSI), a unit of MS&AD, will pay 670 pence per share for Amlin. That represents a 36 per cent premium on Amlin’s closing price on Monday and 2.4 times its net tangible book value.

“This is a wonderful transaction. It is a win for MSI, a win for Amlin and a win for Amlin shareholders,” said Charles Philipps, Amlin’s chief executive officer.

Mr Philipps expects to remain as CEO of the company once the deal is completed. In a statement, the company said Amlin directors will recommend shareholders approve the deal.

This year a number of Asia insurers have sought overseas expansion as market growth has slowed.

The insurance and reinsurance sector has seen a mixture of mergers and buy ups.

Deals this year have involved Catlin, XL, PartnerRe, Ace, Chubb, RenaissanceRe, Platinum Underwriter Holdings, Endurance and Montpelier Re.

While Bermuda insurer Ironshore was bought by Chinese conglomerate Fosun International in a $1.84 billion deal earlier this year. Ironshore, like Amlin, has offices in the ten-storey office building at 141 Front Street.

Before the Amlin deal terms were announced, Mac Salman, at Jefferies Group in Tokyo, wrote in a note: “MS&AD will purchase an established insurance company in developed markets with stable earnings. This will enable MS&AD to use the reinsurance and risk know-how in its divisions abroad.”

The Royal Gazette contacted Amlin to ask if the deal would have an impact on the company’s operations in Bermuda, but had not received a reply at press time.