AIG looks to retake momentum with $5.6m Bermuda deal

American insurer AIG (American International Group) has relaunched its expansionist ambitions by acquiring Validus Holdings, a Bermuda-based reinsurance firm, for $5.56m.

The takeover comes 10 years after AIG was rescued by the US government with a $185bn bailout in 2008, and is being hailed by the company as a turning point. The acquisition marks a sharp departure from years of retrenchment, which saw the group pulling out of markets around the world and disposing of half its assets — in effect shedding around half a trillion dollars from the insurer’s books.

Brian Dupereault, AIG’s new CEO, welcomed the deal, which also marks the group’s return to Lloyd’s of London, the insurance market, after a two-year absence. “There are just a lot of pieces to this company that fit us perfectly, like a glove,” Dupereault said in commenting on the merger. In addition, Validus Re owns the Lloyd’s syndicate Talbot.

AIG is paying $68 cash per share for Caribbean-based Validus Re, which specializes in providing insurance companies with policies against natural disasters and environmental catastrophes. Validus was established in 2005 by George P. Reeth.

ABOUT THE AUTHOR
Christopher Copper-Ind
Christopher Copper-Ind is Editor of International Investment.

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