International insurer announces US$5.3 billion takeover
Japanese insurer Mitsui Sumitomo Insurance Co. (MSI) has announced a US$5.3 billion deal to buy a Lloyd’s of London unit.
According to The Guardian, the Japanese giant has agreed a deal to purchase Amlin PLC in an all cash deal.
The takeover comes just two weeks after Amlin CEO, Charles Philipps, told reporters the insurer was not for sale as Amlin had posted lower than expected profits for the first half of 2015 and is facing further declines in reinsurance prices.
“The combination will accelerate MSI’s strategy of growing its international business,” Mitsui Sumitomo president, Yasuyoshi Karasawa, said in a statement according to The Guardian.
The deal represents the biggest ever buy for MSI, which is owned by MS&AD Insurance Group Holdings and is the fifth acquisition worth more than US$1 billion completed by Japanese insurers this year.
Already, the global insurance industry has generated mergers and acquisitions worth about US$81 billion this year – a record-setting period that has more than doubled the transaction value for the same period in 2014.
Analysts attribute the activity to an influx of reinsurance capital that has pushed prices lower in a variety of lines of business.
Over the past year, XL Catlin combined to form a major international player as ACE and Chubb also announced a major merger, whilst Zurich is still in talks regarding a potential takeover of RSA Insurance.