PartnerRe initially considered acquiring a primary insurer before it setting its sights on Axis Capital, the company has revealed in a recent filing.
And PartnerRe had been considering the acquisition of Axis Capital since board meetings in September and November 2014.
This is according to a Securities and Exchange Commission filing by PartnerRe, which explained that the board had generally concluded that a transaction involving a company in the primary insurance market would be the logical next strategic step.PartnerRe added that this was because such a transaction, in comparison to a transaction with a pure-play reinsurance company, would likely lead to higher levels of value creation for PartnerRe’s shareholders by allowing PartnerRe to expand its business platforms and enter the primary insurance market.
“However, the PartnerRe board of directors discussed the fact that the primary insurance targets that PartnerRe believed it could viably acquire did not have sufficient market presence to enable PartnerRe to enter the primary insurance market in a meaningful manner,” said the filing.
According to directors at the time, Axis, with its roughly even split of reinsurance and insurance business, could be a merger partner that offered PartnerRe’s shareholders the opportunity to be invested in an entity with a primary insurance business.
In addition, they believed that this would provide the opportunity to consolidate in the reinsurance market while achieving significant financial and operational synergies, creating a combined company that would be well-positioned as a leader in the broker-based reinsurance distribution channel.
“The PartnerRe board of directors also considered that a strategic transaction between PartnerRe and AXIS would result in a combined company that would be in a significantly stronger financial and operational position,” it said.
PartnerRe, Axis Capital, Bermuda, Mergers & Acquisitions
