Bermuda-based White Mountains Insurance Group, Ltd. announced that it has entered into a definitive agreement with ABB Ltd. of Switzerland to acquire the Swedish-based Sirius Insurance Group for 3.22 billion SKr. ($437 million).
ABB indicated that it expected to realize a $150 million book loss on the sale of its insurance and reinsurance divisions.
White Mountains noted that the purchase price “is subject to a kronor-for-kronor adjustment to the extent that the total tangible shareholders’ equity value of the acquired companies as of December 31, 2003 is greater or less than SEK3.566 billion (approximately US$470 million).”
The sale includes Sirius’ principal operating companies – Sirius International Insurance Corporation, Sirius America Insurance Company and Scandinavian Reinsurance Company Ltd. Sirius International, a Stockholm-based reinsurance company, is the largest Scandinavia reinsurer, with offices in Stockholm, London, Hamburg, Zurich, Belgium, and Singapore.
Sirius International wrote approximately $400 million in net premiums in 2002. It focuses “mainly on property and other short-tailed lines and no longer writes financial insurance products,” said the bulletin. “Sirius America, a US insurer focused on primary insurance programs since 2000, wrote $96 million of net premiums in 2002. Scandinavian Re is a Bermuda-based finite reinsurer that is in runoff.”
“This acquisition leverages all the strengths of the White Mountains organization,” commented CEO Ray Barrette.” We delivered a clean exit from the business to ABB, we were able to do so quickly, we are adding a nice business to our family of property/casualty insurance and reinsurance companies and the transaction adds significant value for our shareholders.
“Sirius’ management has focused on property and other short-tailed lines of business, allowing them to avoid most of the legacy issues that other international reinsurance companies are facing today. This is an outstanding team that shares White Mountains’ core belief that underwriting comes first,” he added.
White Mountains expects the transaction to close in the second quarter of 2004. It is subject to regulatory approvals and other customary closing conditions.
Was this article valuable?
Here are more articles you may enjoy.