Bermuda-based reinsurer RenaissanceRe has completed its previously announced acquisition of Validus Re, the treaty reinsurance operation of global insurer AIG, a transaction it says creates immediate and long-term value for its shareholders.
First announced back in May and approved by the European Commission in August, RenRe has now closed its takeover of the reinsurer, which includes Validus Reinsurance Ltd. and its consolidated subsidiaries, AlphaCat Managers Ltd., and all renewal rights to the assumed reinsurance treaty unit of Talbot.
As previously announced, the deal sees AIG retain both Talbot Underwriting and Western World, which it acquired as part of its takeover of Validus Holdings in 2018.
In total, AIG received a consideration of $3.3 billion in cash, including a pre-closing dividend, and roughly $275 million in RenRe common shares.
“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,” said Kevin J. O’Donnell, President and Chief Executive Officer of RenRe.
“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.
For RenRe, Sidley Austin LLP and Oxbow Partners acted as legal counsel and integration consultant, respectively. While for AIG, Evercore Group L.L.C. and J.P. Morgan Securities LLC acted as financial advisors, and Wachtell, Lipton, Rosen & Katz and Debevoise & Plimpton LLP acted as legal counsel.
