Acquisition is expected to add $1.7 billion in new shareholders’ equity to PartnerRe

PartnerRe, a provider of multi-line reinsurance to insurance companies, is all set to acquire ParisRe, a Swiss diversified reinsurer. PartnerRe will exchange 0.30 of its common shares for each ParisRe common share outstanding in a stock-for-stock transaction.

According to the company, this acquisition is expected to add $1.7 billion in new shareholders’ equity to PartnerRe. Separately, ParisRe is expected to distribute $310 million as a return of capital to its shareholders, leading to a total transaction value of approximately $2 billion. Upon completion of the transaction, ParisRe, together with its operating subsidiaries, will be fully integrated into PartnerRe’s existing operating structure.

In the first step of the transaction, PartnerRe, which recently acquired approximately 6% of ParisRe’s outstanding common shares, would acquire an additional 57% of ParisRe’s outstanding common shares at the same exchange ratio.

Following the closing of the block purchase which is expected to occur in the fourth quarter of 2009, PartnerRe intends to initiate a voluntary exchange offer for all remaining ParisRe common shares at 0.30 exchange ratio. Shareholders holding approximately 6% of ParisRe’s outstanding shares, have agreed to tender into the offer. The exchange offer is expected to close in the first quarter of 2010.

Greenhill & Co. and UBS Investment Bank served as financial advisors, and Davis Polk & Wardwell provided legal counsel to PartnerRe.