AIG To Buy Validus Holdings In Deal Valued At $5.56 Bln - Quick Facts

(RTTNews) - Insurer American International Group, Inc. (AIG) said it has entered into a definitive agreement to acquire all outstanding common shares of Validus Holdings, Ltd. (VR), a provider of reinsurance, primary insurance, and asset management services.

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 AIG's cash on hand.

AIG noted that the transaction will enhance its General Insurance business, adding a 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 or E&S markets.

The transaction, unanimously recommended by the boards of directors of AIG and Validus, is expected to close in mid-2018.

The acquisition brings to AIG a diverse and complementary set of attractive franchises across specialized products and regions. These include Validus Re, a treaty reinsurer with a focus on property catastrophe, marine and specialty; and AlphaCat, which manages $3.2 billion on behalf of clients by investing in insurance-linked securities products.

The deal also includes the acquisition of Talbot, a Lloyd's of London syndicate focused on short-tail specialty lines, and Western World, a U.S. specialty property and casualty underwriter focused on the small commercial E&S and admitted markets.

AIG expects the transaction to be immediately accretive to its earnings per share and return on equity or ROE.