Bermuda-based Flagstone Reinsurance Holdings Limited announced that it has signed an agreement to invest, via a subsidiary, in the capital stock of Imperial Reinsurance Company Limited, acquiring a 65 percent stake in the Company.
The two companies had previously concluded a “technical underwriting agreement” last October (See IJ web site – https://www.insurancejournal.com/news/international/2007/10/10/84147.htm).
The transaction is subject to regulatory approvals and closing conditions and is expected to close in the second quarter of 2008. Imperial Re, domiciled in South Africa, writes multiple lines of reinsurance in sub-Saharan Africa.
Parent company Imperial Holdings will retain the remaining 35 percent stake and will be represented on the board. Steve Smith will continue to be the managing director of the company. Flagstone said its “capital and technical support will enhance the company’s services, increase market penetration and broaden product distribution, both by line of business and geographically within Africa.”
Flagstone’s Chairman Mark Byrne will become the new Chairman of Imperial Re. He indicated the Flagstone is “excited about this further strengthening of our relationship with Imperial Re and the Imperial Group.”
Byrne described the acquisition as part of Flagstone’s strategy, giving the Company ” capacity in a fast growing, technically adequate market, in a strong economy.” He also noted that Imperial Holdings is a “large and respected conglomerate in South Africa,” and “will make great partners for Imperial Re, as we seek to leverage existing relationships in the Republic of South Africa as well as the broader region. Steve Smith and his team have our full confidence and support.”
Hubert Brody, Imperial CEO commented: “The sale of our stake in the business will create a re-insurance company with equity of approximately Rand 220 million [$28.3 million] and will free up approximately Rand 80 million [$10.3 million] of capital for Imperial Holdings. It unlocks Imperial Re’s true potential throughout sub-Saharan Africa.”
Smith called the deal exciting, and indicated that “it will significantly enhance the company’ s value proposition for the short term insurance market in South Africa and we are sure that it will be welcomed by both insurers and reinsurance brokers. We will be in an unique position in the South African reinsurance market by having a blend of international and South African ownership.”
Source: Flagstone Re: www.flagstonere.bm
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