AIG has agreed to acquire all outstanding common shares of Validus, the provider of reinsurance, primary insurance and asset management services, in a deal worth $5.56 billion.
The transaction will see AIG gain a diverse set of franchises including AlphaCat, Validus’ insurance-linked securities investment management, which currently manages $3.2 billion on behalf of clients.
The reinsurer Validus Re, US specialty property and casualty underwriter Western World, and Lloyd’s of London syndicate Talbot will also be acquired in the deal.
Holders of Validus common shares will receive cash consideration of $68 per share, funded by cash on hand.
The deal, which is expected to be finalised in mid-2018, is part of AIG’s strategy to deliver profitable growth and is predicted to be immediately accretive to AIG’s earnings per share and return on equity.
Peter Zaffino, AIG’s CEO of general insurance, said: “Brokers and customers of both companies will benefit from this acquisition, and I look forward to all that we will be able to accomplish by bringing Validus into AIG.”
Ed Noonan, Validus’ chair and CEO, added: “We believe this transaction offers compelling value for our shareholders and reflects the strength of the business we’ve built together with our talented global team.”
“Joining AIG and becoming part of a larger, more diversified organisation immediately opens new opportunities for our people and our franchise.”
