American International Group (AIG) has agreed to acquire Bermuda-based Validus Holdings, a provider of reinsurance, primary insurance, and asset management services, in an all-cash deal valued at $5.56bn.
The deal includes acquisition of Validus’ reinsurance platform Validus Re, insurance-linked securities asset manager AlphaCat, Lloyd’s of London underwriter operating as Talbot in addition to Western World, a US specialty property and casualty underwriter.
As per terms of the deal, for each share of Validus common shares its shareholders will receive cash consideration of $68.
AIG president and CEO Brian 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.”
Validus chairman and CEO Ed Noonan stated: “Joining AIG and becoming part of a larger, more diversified organization 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.”
AIG said that the acquisition of Validus will be immediately accretive to its earnings per share and return on equity (ROE).
Subject to approval by Validus shareholders and other customary closing conditions, including regulatory approvals, the deal is likely to be closed by mid-2018.