Sunday, 26 March 2017

Brit owner to buy insurance giant in multi-billion-dollar deal

Consolidation continues as insurance giant bought by conglomerate

Canadian financial services powerhouse Fairfax Financial has agreed to buy global (re)insurance giant Allied World for $4.9bn (£3.9bn).

Fairfax is known for buying up insurance and reinsurance operations around the world. It acquired Lloyd’s insurer Brit last year in a £1.2bn deal.

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Fairfax is paying $54 in shares and cash for each Allied World share. The conglomerate said that the price represents an 18% premium to Allied World’s share price of $45.77 when the market closed on 16 December.

The transaction has been unanimously approved by the boards of directors of both companies.

Fairfax chief executive Prem Watsa said: “Allied World is a high-quality company with an excellent long-term track record and an outstanding management team led by Scott Carmilani. Allied World will operate within the Fairfax group on a decentralized basis after closing, and we are looking forward to supporting Scott and the entire team at Allied World in growing their business over the long-term.”

Carmilani added: “This is a tremendous opportunity for Allied World. Our shareholders are being rewarded for the strong performance of Allied World over the last 10 years since going public.”

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