China Re paid $950m for Chaucer
The Hanover Insurance Group has sold its Lloyd’s focussed international specialty business Chaucer to China Re.
The deal is worth $950 in total, including an $85m pre-signing dividend – 1.66 times Chaucer’s tangible equity as of the end of June.
The deal is anticipated to be completed either late this year or early next year.
John C. Roche, president and chief executive at The Hanover said the decision to sell Chaucer had been made after an extensive strategic review.
He added: “This transaction will enable us to build on the growing momentum in our domestic property and casualty businesses, as we continue to advance our long-term strategy and deliver even stronger shareholder returns.
“We will continue to invest in and execute our strategy to be the carrier of choice for our agent partners and their customers.
“This includes accelerated expansion of our specialised capabilities in commercial lines businesses as well as continued growth and penetration in the personal lines and small commercial sectors.”
And Roche said that the deal was also good news for Chaucer.
He added: “The acquisition will enable Chaucer to continue to thrive and prosper by joining forces with China Re Group, as China Re is actively enhancing its international presence and exploring business opportunities in the global market.
“Furthermore, this transaction is an attractive outcome for our shareholders, recognizing the value created through our ownership of Chaucer since its acquisition in 2011.”
John Fowle, chief executive of Chaucer added: “We are very honoured to have China Re as our new partner. We have been extremely impressed by the experience, commitment, and professionalism of China Re since our first meetings and we are excited about the future together.
“At Chaucer, we are fully committed to delivering a first class underwriting and claims service to our brokers, coverholders and clients, and believe that the support of China Re will enable us to build on our success to date, and accelerate our strategy which has profitable growth at its core.”
The deal is subject to regulatory approvals, including the Prudential Regulation Authority, Lloyd’s of London and required approvals from the regulatory entities of the People’s Republic of China, in addition to approval from China Re’s shareholders.
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