On the other, you’re giving up the peace of mind with a new car factory warranty, even if you’ve had a pre-purchase inspection. On the one hand, you’re getting an excellent value, as used cars will always be cheaper than the latest and greatest model years. In Bermuda, Appleby also advised Montpelier.When buying a used car, there are plenty of pros and cons. Montpelier’s financial adviser in connection with the transaction is Credit Suisse Securities (USA) LLC, and its legal counsel is Cravath, Swaine & Moore. RenaissanceRe has completed its merger with Platinum, while XL-Catlin and Axis-PartnerRe mergers have been agreed.Įndurance’s financial advisors in connection with the transaction are Morgan Stanley and Jefferies, and its legal counsel is Skadden, Arps, Slate, Meagher & Flom. The Endurance board will be expanded when the deal closes to include three of Montpelier’s current directors.Ĭonsolidation is sweeping across the reinsurance industry and Bermuda has been the epicentre of mergers and acquisition activity. The combination of our balance sheets, our diverse underwriting platforms and high-quality books of business is a compelling opportunity for our shareholders, customers and distribution partners.” Montpelier CEO Christopher Harris said: “This transaction with Endurance provides significant value for Montpelier shareholders through upfront cash and an equity interest in a combined Endurance with enhanced scale, greater market presence and substantial product and geographic diversity. The cash portion of the consideration will be funded through a pre-closing dividend paid by Montpelier to its common shareholders.Įndurance common shareholders’ equity will increase from $2.8 billion to $4.1 billion, while total capital will rise from $3.7 billion to $5.5 billion, and total cash and invested assets will increase from $6.7 billion to $9.3 billion on a pro-forma basis. The total consideration is $450 million in cash and approximately 21.5 million Endurance shares. Montpelier’s historic high-quality portfolio reflects a disciplined approach to underwriting that is consistent with Endurance’s strong risk management and underwriting culture.”Įndurance will pay $9.89 in cash and 0.472 shares of Endurance for each Montpelier share. “The acquisition also provides Endurance with a natural introduction to the business of managing insurance and reinsurance investment products for third-party capital investors. Importantly, the acquisition materially increases our breadth of distribution with the addition of a good-sized and scalable Lloyd’s platform and an attractive property catastrophe business that complements our existing reinsurance portfolio. “As a result of the transaction, we expect to achieve meaningful transaction synergies through cost savings and greater capital efficiencies. “Endurance’s strategic acquisition of Montpelier represents a compelling value creation opportunity for Endurance’s shareholders, with accretion to earnings per share and return on equity,” Mr Charman said. There was no word on how many jobs may go in Bermuda, where Montpelier employed 67 people as of last summer.Īccording to reports by The Insurance Insider, the deal is the culmination of an auction process and other bidders including Aspen, Hamilton Insurance Group and the Chinese group Fosun. The cash-and-shares deal is worth $40.24 per Montpelier Re share and Montpelier shareholders will own just under a third of the combined company.īoth boards of directors have unanimously approved the merger and Montpelier Re’s largest shareholder, Charlesbank Capital Partners, has agreed to vote in favour of the deal, which is expected to close in the third quarter of this year.īetween then the two companies wrote $3.6 billion in premium last year.Įndurance expects the efficiencies created by the deal to result in annual cost savings of about $60 million. The new combined company will be run by Endurance’s senior management team from its headquarters in Waterloo House on Pitts Bay Road, Endurance said in a statement today.Įndurance chairman and chief executive officer John Charman said the acquisition represented a good deal for his company’s shareholders, and would add a Lloyd’s of London franchise and a third-party capital management business to the company. John Charman: Says the deal is a good one for Endurance shareholdersĮndurance Specialty Holdings Ltd has agreed to acquire fellow Bermuda-based reinsurer Montpelier Re Holdings Ltd in a $1.83 billion deal.
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