Meadowbrook Insurance Group, Inc., headquartered in Southfield, Mich., announced that the group’s shareholders have formally approved the pending acquisition of Meadowbrook by Fosun International Limited.
In late December 2014, Fosun, a Chinese investment group agreed to acquire Meadowbrook for approximately $433 million.
Upon completion of the transaction, each share of Meadowbrook common stock will convert into the right to receive $8.65 in cash (subject to applicable withholding taxes).
Commenting on the pending acquisition, Robert S. Cubbin, president and chief executive officer, stated: “The acquisition of Meadowbrook will enable Fosun to establish a significant presence in the U.S. P&C market. We believe that combining with Fosun further strengthens our capital base as we focus on supporting the needs of our customers, partners and employees, improving our underwriting performance and driving profitability. This transaction is the culmination of a thorough strategic review process to maximize shareholder value.”
The transaction remains subject to regulatory approvals, including insurance regulatory approvals in California, Michigan, Missouri and Ohio, and customary closing conditions The companies expect the acquisition will most likely be completed during the second half of 2015.
The deal will be the first full purchase of a U.S. insurer by a Chinese company, according to Reuters.
Meadowbrook has had a challenging few years. A.M. Best Best issued a warning to the company in late 2012 that it was placing the ratings of Meadowbrook and its subsidiaries under review with negative implications. At that time Best noted the company had experienced worse than expected operating results in 2012 and a reduction in risk-adjusted capitalization levels, and had lower earnings prospects going forward.
A.M. Best downgraded the insurer from “A-“to “B++” in August 2013.
Meadowbrook Insurance Group Inc. has a focus on the specialty program management market. The group includes several agencies, claims and loss prevention facilities, self-insured management organizations and six property and casualty insurance underwriting companies. Meadowbrook has 28 locations in the United States.
Source: Meadowbrook Insurance Group Inc.
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