Insurers agree $3.2bn merger
Switzerland-based insurance giant Allied World Assurance has agreed to merge with US rival Transatlantic Holdings for $3.2bn (£2bn) in stock, it said yesterday.
Transatlantic shareholders will receive 0.88 Allied World share each, or $51.10 per share, representing a 16.1 per cent premium over its closing price on Friday.
While described as a merger, the combined group would be 58 per cent owned by Transatlantic shareholders, with Allied World investors owning about 42 per cent.
The new group will be owned by a new holding company, TransAllied Group Holdings, which will have $21bn in total invested assets.
The deal will see New York-based Transatlantic move its domicile to low-tax Switzerland, where Allied World is headquartered, a source familiar with the situation said.
Allied World Chairman and CEO Scott Carmilani will be the president and chief executive of the new company.
Transatlantic CEO Robert Orlich will retire when the deal closes, which is expected in the fourth quarter of this year.
AIG owned a majority stake in Transatlantic until it was forced to sell it off as part of its efforts to repay the US governments for a massive crisis-era bailout.
Goldman Sachs and Moelis acted as financial advisers to Transatlantic, while Deutsche Bank advised Allied World.