Validus bought up by AIG
Validus Holdings is to be bought up by American International Group (AIG) for a total of $5.56 billion, in the first such M&A deal in the market in 2018.
The transaction has been unanimously recommended by the boards of directors of AIG and Validus. The transaction is expected to close mid-2018, subject to approval by Validus shareholders and other customary closing conditions, including regulatory approvals in relevant jurisdictions.
According to AIG, the transaction enhances its general insurance business, adding a leading reinsurance platform, an insurance-linked securities asset manager, a meaningful presence at Lloyd’s and complementary capabilities in the US crop and excess and surplus (E&S) markets.
“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,” said Brian Duperreault, president and chief executive officer of AIG. “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.”
“We believe this transaction offers compelling value for our shareholders and reflects the strength of the business we’ve built together with our talented global team,” said Ed Noonan, Validus’ chairman and chief executive officer. “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.”
Peter Zaffino, AIG’s chief executive officer, general insurance, said, “I have worked with and admired Validus since its formation and have the utmost respect for what the management team has achieved. They have built a business that is highly compatible with AIG’s general insurance business. Brokers and customers of both companies will benefit from this acquisition, and I look forward to all that we will be able to accomplish by bringing Validus into AIG.”
According to AIG, the acquisition of Validus represents a significant step forward in AIG’s strategy to deliver profitable growth. The acquisition includes Validus subsidiaries that include treaty reinsurer Validus Re, AlphaCat, which manages $3.2 billion on behalf of clients by investing in insurance-linked securities products, Talbot, a Lloyd’s of London syndicate focused on short-tail specialty lines and US specialty property and casualty underwriter Western World, which is focused on the small commercial E&S and admitted markets.