AIG Strikes $5.56 Billion Deal To Acquire a Bermuda Insurer
January 22 2018 - 7:28AM
Dow Jones News
By Leslie Scism
American International Group Inc. is acquiring a Bermuda-based
insurer and reinsurer for $5.56 billion, as its new chief executive
makes good on a promise to reverse nearly a decade of shrinkage
stemming from its near collapse in 2008.
The global insurance conglomerate said Monday it signed a
definitive agreement to acquire Validus Holdings Ltd. in an
all-cash deal. AIG said the acquisition would immediately add to
its earnings.
Reinsurance is an arrangement in which insurers take on the risk
of policies that primary insurers sell to businesses and
individuals. A big product line for Validus is property-catastrophe
reinsurance for hurricanes and other disasters.
The company also has other operations, including a Lloyd's
syndicate, crop insurance, and a unit that insures small U.S.
companies. They overlap minimally with existing businesses at AIG,
a leader in insuring multinational corporations and other large
businesses and a large U.S. life insurer..
At $68 a share, the deal represents a 46% premium to Validus's
closing share price Friday, and a 16% premium to its 52-week
high.
(END) Dow Jones Newswires
January 22, 2018 07:13 ET (12:13 GMT)
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