Argo shareholders agree to merger with Brookfield

The shareholders of Argo Group International has voted to approve an agreement for Brookfield Reinsurance to acquire Argo in an all-cash transaction valued at approximately $1.1 billion.

The deal remains subject to other customary closing conditions, including receipt of required regulatory approvals. Argo and Brookfield Reinsurance expect to complete what they call the merger in the second half of 2023.

The CEO of Argo, Thomas Bradley, had previously described the deal as “t he best path forward” for the company following a strategic review.

As part of the agreement, each issued and outstanding Argo common share will be converted into the right to receive $30.00 in cash at closing of the merger, funded by existing cash on hand and liquidity available to Brookfield Reinsurance.

The merger consideration per Argo common share represents a 6.7% premium to Argo’s closing share price on February 7, 2023, and a 48.7% premium over Argo’s closing share price on September 7, 2022, the last full trading day prior to Argo announcing the sale of Argo Underwriting Agency and its Lloyd’s Syndicate 1200 and the continuation of its strategic alternatives review process.

In connection with the execution of the merger agreement, Voce Capital Management entered into a voting and support agreement whereby Voce Capital Management agreed to vote all of the common shares held by it in favour of the merger and take certain other actions, subject to the terms and conditions of the voting and support agreement.

Under the terms of the merger agreement, Argo has agreed to suspend the payment of dividends on its common shares through the closing of the transaction.