AIG Nabs Validus for $5.6 Billion

Deal expected to close mid-2018.

Global insurer American International Group (AIG) will acquire all outstanding common shares of Bermuda-based Validus Holdings LLC for roughly $5.6 billion, the company announced Monday.

The move will add insurer Validus Re; insurance-linked securities asset manager AlphaCat ($3.2 billion); Talbot, a short-tail specialty line expert and Lloyds of London syndicate; and Western World, a US specialty property and casualty underwriter that focuses on small commercial E&S and admitted markets.  AIG will also acquire Crop Risk Services, giving it access to the North American crop insurance market.

A cash consideration of $68 per share will be distributed among Validus common shareholders.

“Validus is an excellent strategic fit for AIG, bringing new businesses and capabilities to our General Insurance operation, expanding the bench of our management team, and deepening our underwriting expertise,” Brian Duperreault, president and chief executive of AIG, said in a statement. “With our global scale and the strength of our balance sheet, I am confident that Validus will thrive within AIG and strengthen our ability to deliver profitable growth for our shareholders as we strategically position AIG for the future.”

As long as Validus shareholders approve and the acquisition meets other, customary closing conditions, which include regulatory approvals in relevant jurisdictions as well as completion of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the deal is expected to close in mid-2018.

“We believe this transaction offers compelling value for our shareholders and reflects the strength of the business we’ve built together with our talented global team,” Ed Noonan, Validus’ chairman and chief executive, said in a statement. “Joining AIG and becoming part of a larger, more diversified organization immediately opens new opportunities for our people and our franchise. Validus will be able to serve clients and brokers in new and exciting ways, which will enhance our ability to grow profitably.”

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