RenaissanceRe Holdings Ltd. Advances Strategy with $2.985 Billion Acquisition of Validus Re
22 Mai 2023 - 10:27PM
Business Wire
Accelerates Growth in a Favorable Reinsurance Market
Enhances Three Drivers of Profit – Underwriting, Fee and
Investment Income
Creates Top 5 Global Property and Casualty Reinsurer
RenaissanceRe Holdings Ltd. (NYSE: RNR) (“RenaissanceRe”) today
announced it has entered into a definitive agreement with American
International Group, Inc. (“AIG”), whereby RenaissanceRe will
acquire AIG’s treaty reinsurance business, which includes Validus
Reinsurance Ltd. and its consolidated subsidiaries, AlphaCat
Managers Ltd. and its managed funds, and all renewal rights to the
Assumed Reinsurance Treaty Unit of Talbot (collectively, “Validus
Re”).
AIG has committed to deliver at closing $2.1 billion in
unlevered shareholder’s equity to RenaissanceRe with any excess to
be retained by AIG. RenaissanceRe will pay approximately $2.985
billion in total consideration, including $2.735 billion of cash
and $250 million of RenaissanceRe common shares. The cash
consideration is expected to be funded through RenaissanceRe
available funds and proceeds from the issuance of common equity and
debt. The shares received by AIG will be valued at the lower of the
public offer price for an expected underwritten public offering by
RenaissanceRe or the closing price on May 22, 2023.
The agreement has been approved by RenaissanceRe’s Board of
Directors. The transaction is expected to close in the fourth
quarter of 2023 and is subject to customary closing conditions and
regulatory approvals. No shareholder approval is required.
As part of the transaction, AIG will retain 95% of the
development on net reserves at closing. In addition, following the
closing of the transaction, AIG expects to make substantial
investments in RenaissanceRe’s Capital Partners business.
Kevin O’Donnell, President and Chief Executive Officer of
RenaissanceRe, commented: “This acquisition advances our strategy
as a leading global property and casualty reinsurer, providing
additional scale, and increasing our importance to customers.
Furthermore, by gaining access to a large, attractive book of
reinsurance business in a favorable market environment, we expect
to accelerate our three drivers of profit – underwriting, fee, and
investment income. Additionally, we are enhancing our relationship
with AIG and demonstrating how our consistent, highly
differentiated strategy provides us with unique access to large,
one-of-a-kind opportunities that create shareholder value. I have
deep respect for Peter and AIG and look forward to extending our
partnership.”
Sidley Austin LLP and Morgan Stanley acted as legal counsel and
financial advisor, respectively, for RenaissanceRe.
Conference Call Information
RenaissanceRe will host an investment community conference call
discussing the transaction on Monday, May 22, 2023 at 4:45 p.m. ET.
The teleconference can be accessed by dialing 800-245-3047 (U.S.
callers), or 203-518-9765 (international callers), and providing
the passcode RNR0522 approximately fifteen minutes in advance of
the call. A live broadcast of the conference call will also be
available through the “Investors – Webcasts Presentations” section
of the Company’s website at www.renre.com.
Cautionary Statement Regarding Forward-Looking
Statements
Any forward-looking statements made in this Press Release,
including statements about our expectations, forecasts, projections
and estimates regarding the impact of the transactions described
herein, reflect RenaissanceRe’s current views with respect to
future events and financial performance and are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. We may also make forward-looking statements
with respect to our business and industry, such as those relating
to our strategy and management objectives, plans and expectations
regarding our response and ability to adapt to changing economic
conditions, market standing and product volumes, and insured losses
from loss events, among other things. These statements are subject
to numerous factors that could cause actual results to differ
materially from those addressed by such forward-looking statements,
including those disclosed in RenaissanceRe’s filings with the SEC,
including its Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q and the following: the risk that the Validus Re
acquisition may not be completed within the expected timeframe or
at all; the risk that regulatory agencies in certain jurisdictions
may impose onerous conditions following the Validus Re acquisition;
difficulties in integrating Validus Re; risk that the due diligence
process that we undertook in connection with the Validus Re
acquisition may not have revealed all facts that may be relevant in
connection with the Validus Re acquisition; our ability to manage
the growth of the Validus Re operations successfully following the
acquisition of Validus Re; that historical financial statements of
Validus Re are not representative of the future financial position,
future results of operations or future cash flows of Validus Re
following the acquisition of Validus Re; our exposure to natural
and non-natural catastrophic events and circumstances and the
variance they may cause in our financial results; the effect of
climate change on our business, including the trend towards
increasingly frequent and severe climate events; the effectiveness
of our claims and claim expense reserving process; the effect of
emerging claims and coverage issues; the performance of our
investment portfolio and financial market volatility; the effects
of inflation; the ability of our ceding companies and delegated
authority counterparties to accurately assess the risks they
underwrite; our ability to maintain our financial strength ratings;
the highly competitive nature of our industry; our reliance on a
small number of brokers; collection on claimed retrocessional
coverage, and new retrocessional reinsurance being available on
acceptable terms or at all; the historically cyclical nature of the
(re)insurance industries; our ability to attract and retain key
executives and employees; our ability to successfully implement our
business, strategies and initiatives; our exposure to credit loss
from counterparties; our need to make many estimates and judgments
in the preparation of our financial statements; our ability to
effectively manage capital on behalf of investors in joint ventures
or other entities we manage; changes to the accounting rules and
regulatory systems applicable to our business, including changes in
Bermuda and U.S. laws or regulations; other political, regulatory
or industry initiatives adversely impacting us; our ability to
comply with covenants in our debt agreements; the effect of adverse
economic factors, including changes in the prevailing interest
rates and recession or the perception that recession may occur; the
effect of cybersecurity risks, including technology breaches or
failure; a contention by the IRS that any of our Bermuda
subsidiaries are subject to taxation in the U.S.; the effects of
possible future tax reform legislation and regulations in the
jurisdictions in which we operate; our ability to determine any
impairments taken on our investments; our ability to raise capital
on acceptable terms, including through debt instruments, the
capital markets, and third party investments in our joint ventures
and managed fund partners; our ability to comply with applicable
sanctions and foreign corrupt practices laws; and our dependence on
the ability of our operating subsidiaries to declare and pay
dividends.
About RenaissanceRe
RenaissanceRe is a global provider of reinsurance and insurance
that specializes in matching well-structured risks with efficient
sources of capital. The Company provides property, casualty and
specialty reinsurance and certain insurance solutions to customers,
principally through intermediaries. Established in 1993, the
Company has offices in Bermuda, Australia, Ireland, Singapore,
Switzerland, the United Kingdom and the United States.
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version on businesswire.com: https://www.businesswire.com/news/home/20230522005628/en/
Investor Contact: RenaissanceRe Holdings Ltd. Keith McCue Senior
Vice President, Finance & Investor Relations 441-239-4830
Media Contacts: RenaissanceRe Holdings Ltd. Hayden Kenny Vice
President, Investor Relations & Communications 441-239-4946
Kekst CNC Nicolas Capuano 917-842-7859
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