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Aspen confirms acquisition by Apollo for $2.6bn

28th August 2018 - Author: Steve Evans

Bermuda-headquartered Aspen Insurance Holdings has confirmed this morning that it is being acquired by funds under management of Apollo Global Management, LLC for $2.6 billion.

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The fact Aspen has been for sale has been no secret and the insurance and reinsurance firm’s sale has been one of the most discussed, while the involvement of investment giant Apollo as a potential buyer has also been market knowledge for some weeks now.

Today Aspen has confirmed that affiliates of certain Apollo investment funds have entered into a definitive agreement under which Aspen will be acquired by the Apollo Funds.

The Apollo Funds will acquire all of the outstanding shares of Aspen for $42.75 each in cash, valuing the re/insurance firm at approximately $2.6 billion. The acquisition has been approved by Aspen’s Board of Directors.

That’s a roughly 7% premium to the closing Aspen share price of yesterday, although an 11% premium to the day prior.

“We are tremendously excited for the Apollo Funds to acquire Aspen,” commented Alex Humphreys, Partner at Apollo. “We believe that Aspen benefits from strong underwriting talent, specialized expertise and longstanding client relationships which makes them well positioned in the market. We look forward to working with Aspen to build on the existing high quality specialty insurance and reinsurance business and we aim to leverage Apollo’s resources and deep expertise in financial services to support the Company as it embarks on its next chapter.”

Glyn Jones, Chairman of Aspen’s Board of Directors, added, “We are delighted to have reached this agreement with the Apollo Funds. This transaction, which is the outcome of a thorough strategic review by Aspen’s Board of Directors, provides shareholders with immediate value and will allow Aspen to work with an investor that has substantial expertise and a successful track record in the (re)insurance industry.”

Chris O’Kane, Aspen’s Group Chief Executive Officer, also said, “This transaction is a testament to the strength of Aspen’s franchise, the quality of our business and the talent and expertise of our people. Under the ownership of the Apollo Funds, Aspen will have additional scale and access to Apollo’s investment and strategic guidance, which will help us to accelerate our strategy and take Aspen to the next level. We are excited about the future as we embark on a new chapter in our history with a partner that understands our strengths, culture and customer-centric philosophy.”

The acquisition is expected to close in the first half of 2019, subject to regulatory approval and approval from Aspen’s shareholders, as well as satisfactory completion of closing conditions.

No financing is required by either party to complete the transaction and once the acquisition is finished Aspen will become a privately held portfolio company of the Apollo Funds, while its ordinary shares will no longer be listed on the New York Stock Exchange.

The transaction tales Aspen private, providing Apollo with an established insurance and reinsurance platform which it can now use its assets to help scale.

Aspen had been struggling a little on performance in certain areas, but after internal reviews the re/insurer is considered much better positioned today than it was even a year ago, offering Apollo a platform to attempt to grow, as it looks to secure returns for its funds from an established global underwriting platform in the insurance and reinsurance sector.

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