London-based reinsurance broker Benfield Greig Group plc has agreed to acquire Dallas-based E.W. Blanch Holdings, Inc. for $179 million. The fusion of the two groups will create the world’s third largest reinsurance intermediary and risk management service provider with 1700 employees and estimated combined revenues of $410 million, behind Aon Re and Guy Carpenter, Marsh & McLennan’s reinsurance subsidiary.
The new group will combine Blanch’s U.S. business with Benfield’s global reach under the name Benfield Blanch, and comes at an opportune moment. Blanch has been hit by falling revenues and the loss of three of its top executives, and announced last year that it was seeking a merger partner.
Executives of both companies felt they’d made a good match. “We believe that Benfield Greig is an excellent partner for us,” stated Chris Walker, Blanch’s Chairman and CEO.”Our board conducted an extensive process examining our options and determined that this transaction best meets our goal of delivering value to our shareholders. Our clients will be well served by the complementary nature of our products and geographic scope.”
“Benfield and Blanch are truly compatible businesses and are both highly innovative client focused and driven organizations,” stated John Coldman, Benfield’s Chairman. “The new group will be a powerful competitor in all of the key global reinsurance centers and the merger represents an exciting development for the industry.”
Under the terms of the agreement, Benfield will pay $13.50 per share, a 68 percent premium over its recent closing price, and a boon to shareholders who had seen it drop below $8.00. Approval must be received from 75 percent of Blanch’s shareholders, but this doesn’t appear to present serious difficulties. 50 percent have already approved the deal.
The merger would reunite two former Blanch executives, Rodman Fox and Paul Karon, who resigned last year and joined Benfield. Fox led the search for merger partners, and is expected to rejoin Blanch in a top management capacity.
Topics Reinsurance
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