Hannover Re today reached agreement to sell its US subsidiary Praetorian Financial Group, New York, to QBE.
"This successful sale demonstrates that it was the right decision to carve out our US primary specialty business into Praetorian", Hannover chief executive Wilhelm Zeller explained.
Once this transaction is completed Hannover Re will concentrate exclusively on its core business of reinsurance.
QBE is to acquire 100% of the share capital of Praetorian. The purchase price of $800m represents 2.1 times Praetorian's estimated tangible book value at year-end 2006.
“Over the past year, Praetorian has made significant strides in strengthening and refining the company's operational capabilities”, Rod Fox, CEO of Praetorian Financial Group, said. “The combination with QBE the Americas will build on those successes while allowing us to offer a broader range of products and maintain continuity in client relationships. We are excited by the opportunities 2007 presents and look forward to joining the very talented QBE family.”
Hannover Re intends to redeploy the capital freed up by this transaction to its core property/casualty and life/health reinsurance businesses.
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