US-based insurance group Liberty Mutual has signed a definitive agreement to acquire the entirety of specialist insurer Ironshore from Fosun International Ltd of China.
The transaction is expected to be finalised in the first half of 2017, pending regulatory approval. The value is expected to be worth US$3 billion, which equates to 145% of Ironshore’s actual tangible book value as of year-end 2016.
After the sale, Ironshore will continue to operate under the same management team and brand, but it will be under the Liberty Mutual umbrella and will focus on growing the group’s specialty lines operations.
“We are pleased to have Ironshore and its proven management team led by CEO Kevin H. Kelley join Liberty Mutual,” said David H. Long, Liberty Mutual Insurance’s chairman and CEO. “Ironshore has a track record of profitably underwriting global and diverse specialty risks insurance and is an ideal complement to Liberty Mutual, providing additional scale, expertise, innovation, and market relationships to our $5 billion Global Specialty business.”
Meanwhile, Kevin Kelly, Ironshore CEO, described the transaction as a “win-win proposition and value-creating for both companies.”
“Ironshore will become part of another ‘A’ rated company with a global reach, a strong balance sheet, wide client base and a much greater capacity to drive profitable growth,” he added.
Ironshore was established in 2006 and had US$2.2 billion in gross written premiums as of the end of 2015. It has 800 employees in 15 countries worldwide. In May 2015, Fosun purchased the 80% of Ironshore it didn’t own for US$1.84 billion. Fosun is backed by Chinese billionaire Go Guangchang, a self-proclaimed student of Warren Buffet.
In June 2016, the Committee on Foreign Investment in the United States (CFIUS
) had probed Fosun over the deal, due to a potential conflict of interest stemming from a liability insurance product offered to US government officers.
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