8th Sep 2015 06:29
LONDON (Alliance News) - Amlin PLC, a London-listed specialty insurer and reinsurer, on Tuesday said it has agreed to be acquired by Mitsui Sumitomo Insurance Co Ltd in a deal valuing the insurer at about GBP3.47 billion, as the wave of mergers and acquisitions continues across the industry.
Reinsurers have been consolidating in order to achieve scale, diversification and cost savings to help combat intense competition and a softening market. Mitsui Sumitomo has been looking to expand its presence in Europe, the US and other markets, and made clear that Amlin's presence in the Lloyd's of London insurance market was a factor behind the deal, bolstering its existing operations there.
Mitsui Sumitomo Insurance, which is owned by Japan's MS&AD Insurance Group Holdings Inc, will pay 670 pence per Amlin share. In addition, Amlin shareholder will be able to receive the insurer's 8.4 pence interim dividend declared last month.
Yasuyoshi Karasawa, president and chief executive officer of MSI, said the combination of the two businesses will create an insurance company with an international business anchored in the Lloyd's market.
"We believe this combination will create significant value for MS&AD's shareholders, and will also position the group to drive sustainable long-term growth given the enhanced platform that the combined group will enjoy. This transaction will also allow us to better serve our clients and brokers, given the enhanced product mix and scale of the combined group," Karasawa said in a statement.
Amlin Chief Executive Charles Philipps said the combination of the two companies is "extremely compelling".
"We have always had a very high regard for MSI, our strategies and corporate values are closely aligned, and this transaction will now provide Amlin with the increased scale and financial muscle that will be required for long term success in our industry. It delivers excellent value for shareholders, improved career prospects for our employees, and enhanced continuity and security for our clients," Philipps said.
The price tag is a 36% premium to Amlin's closing price on Monday and a 2.4 times multiple to the insurer's net tangible book value per share on a fully diluted basis of 275.2 pence at the end of June.
Amlin was advised by Evercore and Rothschild on the deal.
By Samuel Agini; [email protected]; @samuelagini
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