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
NEW YORK & PEMBROKE, Bermuda--(BUSINESS WIRE)--Jan. 22, 2018--
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.
This press release features multimedia. View the full release here:
http://www.businesswire.com/news/home/20180122005880/en/
“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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180122005880/en/
Source: AIG
AIG
Investors:
Liz Werner, +1-212-770-7074
elizabeth.werner@aig.com
or
Media:
Matt
Gallagher, +1-212-458-3247
matthew.gallagher2@aig.com
or
Daniel
O’Donnell, +1-212-770-3141
daniel.odonnell@aig.com
or
Validus
Holdings, Ltd.
Investors:
+1-441-278-9000
investor.relations@validusholdings.com
or
Media:
Brunswick
Group
Charlotte Connerton or Mustafa Riffat
+1-212-333-3810