The transaction is expected to create a new company with a combined capital valued at $3.3bn, expanding its position in insurance and reinsurance markets across 150 countries
Third Point Reinsurance (Third Point Re) has agreed to acquire Sirius International Insurance Group (Sirius Group), a Bermuda-domiciled insurance firm, in a deal worth $788m.
The deal, which is anticipated to be closed in the first quarter of 2021, comprises cash and stock transaction and will create a new company whose capital will be valued at $3.3bn.
The newly-formed company will be renamed as SiriusPoint and is expected to be a diversified company, expanding its presence in insurance and reinsurance markets in almost 150 countries.
According to Third Point Re, the transaction will be financed through a combination of cash-on-hand; Third Point Re equity issued to Sirius Group shareholders; Third Point Re equity issued to Daniel Loeb, CEO and CIO of Third Point and currently Third Point Re’s largest individual shareholder, pursuant to an agreement to acquire SiriusPoint shares worth $50m at the closing; and other debt or equity financing, if required.
Third Point Re non-executive chairman of the board, Siddhartha Sankaran, has been appointed as the CEO and chairman to lead SiriusPoint, post-closure.
Third Point Re’s current CEO, Dan Malloy, will remain a senior underwriting executive of SiriusPoint after the closing the deal.
Third Point Re non-executive chairman of the board Siddhartha Sankaran comments on the acquisition
Sankaran said: “We are excited to create a powerful new entity that focuses on underwriting first but strives for excellence in its investment results.
“This transaction further strengthens our reinsurance operations and positions us to enter lines of business with higher risk-adjusted returns to achieve underwriting profitability.
“Combining with Sirius Group accelerates our continuing objective to deliver consistently strong book value per share growth over the long-term.
“Our new scale and global platform, diverse franchise, and enhanced financial profile will enable us to provide tremendous value to clients, brokers, and shareholders. I look forward to working with Sirius Group’s terrific and dedicated team.”
Sirius Group’s president and CEO Kip Oberting will step down from his position once the deal is closed.
Sirius Group board non-executive chairman Meyer Frucher said: “This strategic business combination is the result of a lot of hard work and the collaborative efforts of the Sirius Group Board, management team and CMIH and is a win-win for both Sirius Group and Third Point Re.
“I would especially like to acknowledge and thank Kip Oberting and Gene Boxer for their dedication and tireless efforts to ensure the successful resolution and conclusion of the firm’s strategic review process.”
On the transaction, J.P. Morgan Securities is serving as sole financial advisor to Third Point Re; EA Markets LLC is serving as financing advisor and Debevoise & Plimpton is the legal counsel to Third Point Re.
Barclays Capital is acting as sole financial advisor to Sirius Group on the transaction, while Sidley Austin and Conyers Dill & Pearman are acting as legal advisors to Sirius Group.