AIG completes Validus acquisition
AIG has completed the deal to buy Bermudian firm Validus Holdings for $5.56bn.
The deal, announced in January, sees AIG acquire all Validus’s common shares at $68 each. It is the first major acquisition initiated by CEO Brian Duperreault since he took the helm last summer.
The deal includes Validus Re and specialty Lloyd’s syndicate Talbot. AIG said Validus “adds attractive and diversified franchises”, with US commercial excess and surplus underwriter Western World, US firm Crop Risk Service and insurance-linked securities (ILS) asset manager AlphaCat, which manages $3.2bn of ILS for clients, purchased by AIG.
The insurer said the Validus group of general insurance businesses will add instant value to AIG’s earnings and return on equity.
“We are very pleased to welcome Validus to AIG. Validus’s experienced team and complementary businesses will help us deliver sustainable, profitable growth as we continue to build value for our shareholders,” Mr Duperreault said.
Speaking after the acquisition announcement early this year, he told analysts the Validus deal was particularly attractive because it offered AIG a return to reinsurance business and access to the ILS markets.
Peter Zaffino, AIG’s CEO of general insurance, said: “We look forward to working with the Validus team on the expanded capabilities and value we can deliver to our clients and broker partners. The Validus businesses will be immediately accretive to our performance in general insurance now that they are officially part of AIG.”
