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.