Two will soon become one, as two major names in the reinsurance world are set to combine their operations.
A definitive agreement has been reached between Sirius International Insurance Group, a multi-line insurer and reinsurer, and specialty reinsurer Third Point Reinsurance Ltd, to combine in a stock and cash transaction. The combined firm will subsequently be renamed as SiriusPoint Ltd, with approximately US$3.3 billion of tangible capital. The deal will be financed by Third Point Re “through a combination of cash-on-hand; Third Point Re equity issued to Sirius Group shareholders; Third Point Re equity issued to Daniel S. Loeb, CEO and chief investment officer of Third Point LLC, and currently Third Point Re’s largest individual shareholder, pursuant to an agreement to purchase approximately US$50 million worth of SiriusPoint shares at closing; and if necessary, other debt or equity financing.”
According to a release announcing the move, the two businesses are “highly complementary” and have a “shared strategic vision.” The hope is that the new firm will be ideally positioned to pursue expansion opportunities across almost 150 countries.
Once the deal is finalized, SiriusPoint will be led by current non-executive chairman of the board at Third Point Re Siddhartha (Sid) Sankaran. He will take the role of chairman and chief executive officer of the combined firm. Meanwhile, current CEO of Third Point Re Dan Malloy will remain as a senior underwriting executive.
“We are excited to create a powerful new entity that focuses on underwriting first but strives for excellence in its investment results,” said Sankaran. “This transaction further strengthens our reinsurance operations and positions us to enter lines of business with higher risk-adjusted returns to achieve underwriting profitability. Combining with Sirius Group accelerates our continuing objective to deliver consistently strong book value per share growth over the long-term. Our new scale and global platform, diverse franchise, and enhanced financial profile will enable us to provide tremendous value to clients, brokers, and shareholders. I look forward to working with Sirius Group's terrific and dedicated team.”
The agreement already has the unanimous approval of both companies’ board of directors but remains subject to approval by shareholders of both firms, as well as requiring regulatory approvals. It is expected to complete in the first quarter of 2021.