Global insurance firm XL Group has confirmed that it is engaged in preliminary discussions to acquire Lloyd’s of London insurer Catlin Group, in a deal that could be valued around £2.5bn.
XL would acquire100% of Catlin for consideration of 410p in cash and 0.130 shares of XL for each Catlin common share, under the indicative terms of the possible offer.
The possible offer values each Catlin share at 699p, on the basis of the closing price of an XL share on 16 December of $35.01, an exchange rate of $1.573:£1 and a fully diluted share count of 386 million shares.
XL Group CEO Mike McGavick said: "Both XL and Catlin – respected, innovative, global P&C firms – are well positioned on their own. However, we both believe that we will be far better positioned and stronger together.
"Specifically, the combined entity would be a leader in the global specialty and property cat markets and would make greater and more efficient use of both companies’ global networks and infrastructure."
In addition, Catlin confirmed that that it is in advanced negotiations regarding the sale of its interest in Box Innovation Group.
Catlin is a global specialty property / casualty insurer and reinsurer, writing more than 30 lines of business. It has six underwriting hubs in the UK, Bermuda, the US, Asia Pacific, Europe, and Canada.
XL Group, through its subsidiaries, offers property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises across the globe.
Image: XL Group plans to acquire specialty property / casualty insurer and reinsurer Catlin Group. Photo: courtesy of Stuart Miles/ FreeDigitalPhotos.net.