EC gives go-ahead to RenRe purchase of Validus

RenaissanceRe’s purchase of American International Group’s reinsurance subsidiaries moved a step closer to completion after the European Commission this week approved the sale.

The EC said it has approved the sale of Bermuda-based Validus Reinsurance, AlphaCat Managers and Talbot Underwriting.

“The Commission concluded that the proposed acquisition would raise no competition concerns, given the limited horizontal overlaps and vertical relationships resulting from the proposed transaction,” the statement said.

“The transaction was examined under the simplified merger review procedure.”

RenRe has said it expects the $3 billion deal to complete in the second half of this year.

Under the sale agreement, the Bermuda-based re/insurer will pay $2.74 billion in cash and $250 million in RenaissanceRe common shares.

AM Best said AIG is also expected to receive all capital in excess of $2.1 billion of shareholders’ equity of Validus Re and achieve future capital synergies of approximately $400 million from the recapture of reserves due to transferring the Validus Re balance sheet to RenaissanceRe, which together, as of December 31, 2022, was over $1.5 billion. This brings the total estimated transaction value to more than $4.5 billion.