RenaissanceRe Holdings Ltd. announced it has concluded its acquisition of Validus Re, the treaty reinsurance business of American International Group.

AIG received total consideration of $3.3 billion in cash, including a pre-closing dividend, and approximately $275 million in RenaissanceRe common shares.

The deal, which was announced on May 22, 2023, includes Validus Reinsurance Ltd. and its consolidated subsidiaries, AlphaCat Managers Ltd., and all renewal rights to the Assumed Reinsurance Treaty Unit of Talbot (together known as Validus Re).

AIG will retain Talbot Underwriting and Western World, which the company purchased as part of its acquisition of Validus Holdings Ltd. in 2018.

“We are delighted to complete the Validus Re acquisition today. We are bringing together two of the best reinsurance underwriters and look forward to the risk expertise and scale that our combined company will bring to our customers,” commented Kevin J. O’Donnell, president and chief executive officer of RenaissanceRe, in a statement.

“This transaction accelerates our strategy, expands our ability to match efficient capital to desirable risk, and positively impacts each of our three drivers of profit – underwriting, fee and investment income,” O’Donnell added.

“We are pleased to extend our partnership with AIG and have strong conviction that this transaction will create both immediate and long-term value for our shareholders,” he added.

At the time of the May 2023 announcement, RenRe said the acquisition creates a top five global P/C reinsurer.

The deal “further simplifies our business model and reduces volatility in our portfolio while generating significant cash liquidity and capital efficiencies that enable us to accelerate our capital management strategy,” said AIG’s Chairman and CEO Peter Zaffino in a statement in May.

Sidley Austin LLP and Oxbow Partners acted as legal counsel and integration consultant, respectively, for RenaissanceRe.

Evercore Group L.L.C. and J.P. Morgan Securities LLC acted as financial advisers for AIG, while Wachtell, Lipton, Rosen & Katz and Debevoise & Plimpton LLP acted as legal counsel.

Source: RenaissanceRe and AIG