XL Capital Ltd. is in talks with its French partner, Les Mutuelles du Mans Assurances Group (MMA), to acquire a majority 67 percent controlling interest in their joint reinsurance venture Le Mans Re.
Henry C.V. Keeling, head of XL’s reinsurance operations, sited stronger levels of demand for XL’s reinsurance products and the need to increase the company’s access to Continental Europe, as reasons for the acquisition.
XL established Le Mans Re with MMA in 1999, and said it has been a satisfactory arrangement. Jean-Claude Seys, MMA’s CEO indicated that, as reinsurance was not one if his company’s core businesses, he felt that a change in ownership percentage would help Le Mans Re in the current market, as XL would be in a position to allocate more resources for its development.
He also stressed that the move would give a mid-sized reinsurer, like Le Mans Re, a higher level of integration with a specialized international group with experienced skills and personnel. It had gross written premiums last year of around $260 million.
Neither company indicated the financial terms for XL’s increased stake, but the company has recently secured $750 million in additional financing. $250 million through the issuance of convertible bonds (See IJ Website Sept. 5) and an additional $500 million in Senior Notes issued last Friday. XL said the funds would be used for general corporate purposes, “which may include the repayment of a portion of its outstanding indebtedness, acquisitions and the purchase of its outstanding ordinary shares.”|”xl, in, talks, acquire, majority, stake, in,
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