Carlyle, T&D complete acquisition of majority stake in Fortitude

The Carlyle Group and T&D Holdings have completed their acquisition of a 76.6 percent interest in Fortitude Group Holdings from American International Group (AIG).

At closing, AIG received approximately $2.2 billion in sale proceeds, including the purchase price of $1.8 billion and additional consideration paid in accordance with the terms of the purchase agreement.

Fortitude group companies include Fortitude Re, which is the reinsurer of approximately $30 billion of reserves from AIG’s legacy life and retirement run-off lines and approximately $4 billion of reserves from AIG’s legacy general insurance run-off lines.

Brian Duperreault, AIG’s chief executive officer, said the closing of the transaction marked a significant milestone in AIG’s strategy to efficiently manage its legacy liabilities and strengthen its balance sheet.

“Fortitude Re will continue to be an important partner for AIG,” he added.

Kewsong Lee, Carlyle’s co-chief executive officer, said: “Our partnership with Fortitude Re represents an important strategic investment that is focused on growing the platform to bring innovative solutions to the insurance industry. Fortitude Re has performed remarkably well in the current environment thanks to its robust risk management, and we believe it is well-positioned to deliver sustainable growth and profitability.”

Carlyle and a newly created Carlyle-managed fund now hold 71.5 percent of Fortitude Re, which includes the 19.9 percent stake acquired by Carlyle in November 2018. T&D holds 25 percent and AIG holds 3.5 percent.

The transaction was first announced in November 2019.