Brookfield Re completes $1.1bn acquisition of Argo
Brookfield Reinsurance has completed its $1.1 billion acquisition of specialty re/insurer Argo Group, Argo announced today.
Bermuda-based Argo has also announced the appointment of Jennifer Snyder as chief executive officer of Argo, succeeding chairman and CEO Thomas Bradley who is retiring.
Argo said the all-cash transaction at $30 a share valued the company at $1.1 billion. Argo’s common shares have ceased trading on the New York Stock Exchange.
“Argo’s leading US specialty platform adds a foundational piece to Brookfield Reinsurance’s expanding US P&C operations and increases Brookfield Reinsurance’s assets to over $50 billion,” Argo said.
Snyder, an experienced executive with over 30 years of industry experience, joined Argo in 2022 as President, U.S. Insurance.
Goldman Sachs & Co. LLC served as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to Argo on the transaction.
No announcement has been made by Bermuda-based Brookfield Re yet, but in its earning announcement last week, the company said the acquisition, along with the purchase of American Equaity Life, expected to close in the first quarter of next year, would give the company over $100 million in assets across a diversified platform of life, annuities and P&C.
“With the strong, complementary distribution channels between the companies and our existing platform, we have a credible path to meaningfully grow our insurance assets organically, and by leveraging Brookfield’s investment capabilities, these assets will be redeployed at attractive risk-adjusted returns, driving increased spread earnings and delivering significant returns to our shareholders,” the company said.
Brookfield Re also revealed that in the third quarter, it had been bolstered by a contribution by Brookfield Corporation of $2.1 billion of real estate and other assets into BNRE in exchange for Class C shares, to support the growth of the business.
In its results, Brookfield Re reported net income of $77 million in the third quarter compared to $139 million in the same period in 2022.
It recorded net premiums and other policy revenue of $1.02 billion compared to $1.06 billion in 2022.
Net investment income was $525 million compared to $451 million a year earlier, while net investment losses were $94 million compared to $133 million in 2022.
Interest sensitive contract benefit expenses jumped to $290 million from $114 million while changes in fair value benefit swung from a gain of $45 million to a loss of $35 million.