Acquisition is significant step forward in AIG’s strategy for
profitable growth and brings a diverse and complementary set of
attractive franchises across specialized products and regions
Acquisition significantly enhances AIG’s General Insurance
capabilities, adding a leading reinsurance underwriter, a highly
regarded operation at Lloyd’s, an enhanced offering in the U.S.
domestic market, and an insurance-linked securities asset
manager
Acquisition expected to be immediately accretive to AIG’s
earnings and return on equity (ROE)
Validus brings well-respected management and underwriting teams
with an established track record of underwriting performance
All-cash transaction of $68.00 per Validus share represents
attractive value for Validus shareholders, to be funded by cash on
hand
Leading global insurer American International Group, Inc. (NYSE:
AIG) today announced it has entered into a definitive agreement to
acquire all outstanding common shares of Validus Holdings, Ltd.
(“Validus,” NYSE: VR), a leading provider of reinsurance, primary
insurance, and asset management services. The transaction enhances
AIG’s General Insurance business, adding a leading reinsurance
platform, an insurance-linked securities asset manager, a
meaningful presence at Lloyd’s and complementary capabilities in
the U.S. crop and excess and surplus (E&S) markets. Holders of
Validus common shares will receive cash consideration of $68.00 per
share, for an aggregate transaction value of $5.56 billion, funded
by cash on hand.
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“Validus is an excellent strategic fit for AIG, bringing new
businesses and capabilities to our General Insurance operation,
expanding the bench of our management team and deepening our
underwriting expertise,” said Brian Duperreault, President and
Chief Executive Officer of AIG. “With our global scale and the
strength of our balance sheet, I am confident that Validus will
thrive within AIG and strengthen our ability to deliver profitable
growth for our shareholders as we strategically position AIG for
the future.”
Ed Noonan, Validus’ Chairman and Chief Executive Officer, said,
“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 organization immediately opens
new opportunities for our people and our franchise. Validus will be
able to serve clients and brokers in new and exciting ways, which
will enhance our ability to grow profitably.”
Peter Zaffino, AIG’s Chief Executive Officer, General Insurance,
said, “I have worked with and admired Validus since its formation
and have the utmost respect for what the management team has
achieved. They have built a business that is highly compatible with
AIG’s General Insurance business. 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.”
Strategic Rationale
The acquisition of Validus represents a significant step forward
in AIG’s strategy to deliver profitable growth. The acquisition
brings a diverse and complementary set of attractive franchises
across specialized products and regions:
- Validus Re, a leading treaty reinsurer
with a focus on property catastrophe, marine and specialty, brings
deep relationships with brokers and clients and will benefit from
being part of a more diversified business, along with the
additional size and strength of AIG’s balance sheet.
- AlphaCat, which manages $3.2 billion on
behalf of clients by investing in insurance-linked securities
products, will leverage the underwriting expertise within Validus
Re and provide greater risk management flexibility.
- Talbot, a Lloyd’s of London syndicate
focused on short-tail specialty lines, will broaden AIG’s technical
underwriting expertise and provide access to distribution in the
largest specialty insurance market in the world. Talbot’s brokers
and clients will benefit from the complete suite of capabilities
that has made AIG a global leader, along with access to solutions
both within and outside of the Lloyd’s market.
- Western World, a U.S. specialty
property and casualty underwriter focused on the small commercial
E&S and admitted markets, will add technical expertise in
binding authority. In addition, AIG gains Crop Risk Services, which
provides access to the North American crop insurance market.
Validus also adds to AIG’s talent and underwriting capabilities
with the addition of well-respected management and underwriting
teams with a consistent record of strong underwriting results.
Compelling Financial Benefits for AIG and Validus
The transaction is expected to be immediately accretive to AIG’s
earnings per share and return on equity (ROE). Validus brings
complementary, market-leading capabilities to AIG, enhancing AIG’s
platform and long-term growth opportunities for both companies. The
diversification benefits of the transaction also provide
significant additional capital efficiencies over time.
Steps to Closing
The transaction has been unanimously recommended by the boards
of directors of AIG and Validus. The transaction is expected to
close mid-2018, subject to approval by Validus shareholders and
other customary closing conditions, including regulatory approvals
in relevant jurisdictions and the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
Advisors
Citigroup Global Markets Inc., Perella Weinberg Partners LP and
Debevoise & Plimpton LLP advised AIG on the transaction.
Validus was advised by J.P. Morgan Securities LLC and Skadden,
Arps, Slate, Meagher & Flom LLP.
Analyst and Investor Call
AIG will host a conference call on Monday, January 22, 2018, at
8:00 a.m. EST to discuss the proposed transaction. The call is open
to the public and can be accessed via a live listen-only webcast in
the Investor Relations section of www.aig.com. For domestic
callers, the number is 800-239-9838. For international callers, the
number is +1-323-794-2551. The confirmation code is 5199391. A
replay will be available at the same URL link as well as by
telephone. For domestic callers, the number is 888-203-1112 and for
international callers, 719-457-0820 with the same confirmation
code.
About AIG
American International Group, Inc. (AIG) is a leading global
insurance organization. Founded in 1919, today AIG member companies
provide a wide range of property casualty insurance, life
insurance, retirement products, and other financial services to
customers in more than 80 countries and jurisdictions. These
diverse offerings include products and services that help
businesses and individuals protect their assets, manage risks and
provide for retirement security. AIG common stock is listed on the
New York Stock Exchange and the Tokyo Stock Exchange.
Additional information about AIG can be found at www.aig.com |
YouTube: www.youtube.com/aig | Twitter: @AIGinsurance
www.twitter.com/AIGinsurance | LinkedIn:
www.linkedin.com/company/aig. These references with additional
information about AIG have been provided as a convenience, and the
information contained on such websites is not incorporated by
reference into this press release.
AIG is the marketing name for the worldwide property-casualty,
life and retirement, and general insurance operations of American
International Group, Inc. For additional information, please visit
our website at www.aig.com. All products and services are written
or provided by subsidiaries or affiliates of American International
Group, Inc. Products or services may not be available in all
countries, and coverage is subject to actual policy language.
Non-insurance products and services may be provided by independent
third parties. Certain property-casualty coverages may be provided
by a surplus lines insurer. Surplus lines insurers do not generally
participate in state guaranty funds, and insureds are therefore not
protected by such funds.
About Validus Holdings, Ltd.
Validus Holdings, Ltd. is a leading global provider of
reinsurance, insurance, and asset management services, delivering
its premier solutions through four diversified yet complementary
operating companies: Validus Reinsurance, Ltd., a global
reinsurance group focused primarily on treaty reinsurance; Talbot
Underwriting Ltd., a specialty (re)insurance group operating within
the Lloyd’s market through Syndicate 1183; Western World Insurance
Group, Inc., a U.S. specialty lines organization; and AlphaCat
Managers, Ltd., a Bermuda-based investment advisor managing capital
for third parties and Validus through insurance-linked securities
and other property catastrophe and specialty reinsurance
investments.
Research and analytics are at the core of Validus’ operations
and provide its team of expert practitioners with the knowledge and
insight required to effectively model and interpret risk – an
approach that consistently benefits clients and ensures their needs
are met. Validus maintains a worldwide presence with more than
1,000 employees in 19 offices across all major regions and is
listed on the New York Stock Exchange under the ticker symbol
VR.
More information about the Validus group of companies can be
found at validusholdings.com.
Forward-Looking Statements
Certain statements in this press release may include
projections, goals, assumptions and statements that may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, and AIG and Validus may
make related oral, forward-looking statements on or following the
date hereof. These projections, goals, assumptions and statements
are not historical facts but instead represent only AIG’s and
Validus’ belief regarding future events, many of which, by their
nature, are inherently uncertain and outside AIG’s and Validus’
control. These projections, goals, assumptions and statements
include statements preceded by, followed by or including words such
as “will,” “believe,” “anticipate,” “expect,” “intend,” “plan,”
“focused on achieving,” “view,” “target,” “goal,” or “estimate.” It
is possible that AIG’s or Validus’ actual results and financial
condition will differ, possibly materially, from the results and
financial condition indicated in these projections, goals,
assumptions and statements.
The proposed transaction is subject to risks and uncertainties
and factors that could cause AIG’s or Validus’ actual results to
differ, possibly materially, from those in the specific
projections, goals, assumptions and statements include, but are not
limited to (i) that AIG and Validus may be unable to complete the
proposed transaction because, among other reasons, conditions to
the closing of the proposed transaction may not be satisfied or
waived; (ii) uncertainty as to the timing of completion of the
proposed transaction; (iii) the inability to complete the proposed
transaction due to the failure to obtain Validus shareholder
approval for the proposed transaction or the failure to satisfy
other conditions to completion of the proposed transaction,
including that a governmental entity may prohibit, delay or refuse
to grant approval for the consummation of the transaction; (iv) the
failure to realize the expected synergies from the transaction or
delay in realization thereof; (v) the occurrence of any event,
change or other circumstances that could give rise to the
termination of the merger agreement; (vi) risks related to
disruption of management’s attention from Validus’ ongoing business
operations due to the proposed transaction; (vii) the effect of the
announcement of the proposed transaction on Validus’ relationships
with its clients, operating results and business generally; (viii)
the outcome of any legal proceedings to the extent initiated
against AIG, Validus or others following the announcement of the
proposed transaction, as well as AIG’s and Validus’ management’s
response to any of the aforementioned factors; (ix) industry
conditions; and (x) other factors that can be found in AIG’s press
releases and Securities and Exchange Commission (“SEC”)
filings.
AIG and Validus are not under any obligation (and expressly
disclaim any obligation) to update or alter any projections, goals,
assumptions or other statements, whether written or oral, that may
be made from time to time, whether as a result of new information,
future events or otherwise.
Additional Information and Where to Find It
In connection with the proposed transaction, Validus plans to
file relevant materials with the SEC, including a proxy statement
on Schedule 14A. Promptly after filing its definitive proxy
statement with the SEC, Validus will mail the definitive proxy
statement to each stockholder entitled to vote at the special
meeting relating to the transaction. INVESTORS AND STOCKHOLDERS ARE
URGED TO CAREFULLY READ THE PROXY STATEMENT (INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO AND ANY DOCUMENTS INCORPORATED BY
REFERENCE THEREIN) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION
WITH THE TRANSACTION THAT VALIDUS WILL FILE WITH THE SEC WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE TRANSACTION AND THE PARTIES TO THE TRANSACTION. The
definitive proxy statement, the preliminary proxy statement, and
other relevant materials in connection with the transaction (when
they become available) and any other documents filed by Validus
with the SEC, may be obtained free of charge at the SEC’s website
(www.sec.gov).
Participants in the Solicitation
Validus and its directors and executive officers are deemed to
be participants in any solicitation of Validus’ shareholders in
connection with the proposed transaction. Information about
Validus’ directors and executive officers is available in Validus’
definitive proxy statement for its 2017 annual general meeting of
shareholders, which was filed with the SEC on March 16, 2017.
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version on businesswire.com: http://www.businesswire.com/news/home/20180122005880/en/
AIGInvestors:Liz Werner,
+1-212-770-7074elizabeth.werner@aig.comorMedia:Matt Gallagher,
+1-212-458-3247matthew.gallagher2@aig.comorDaniel O’Donnell,
+1-212-770-3141daniel.odonnell@aig.comorValidus Holdings,
Ltd.Investors:+1-441-278-9000investor.relations@validusholdings.comorMedia:Brunswick
GroupCharlotte Connerton or Mustafa Riffat+1-212-333-3810
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