Third Point Re to acquire rival reinsurer Sirius Group for $788m
Third Point Re, Sirius merger : Bermuda-based specialty property and casualty reinsurer Third Point Reinsurance (Third Point Re) has signed a cash cum stock deal worth around $788 million to acquire Sirius International Insurance Group (Sirius Group), a global multi-line insurer and reinsurer.
Sirius Group, which is also based in Bermuda, will enable Third Point Re to create an enlarged global firm with nearly $3.3 billion of tangible capital. The combined company, which will be renamed SiriusPoint, is expected to be well placed to pursue a variety of significant expansion opportunities across the insurance and reinsurance market.
The enlarged company is said to combine two highly complementary businesses that have a shared strategic vision for offering insurance and reinsurance solutions to clients and brokers across 150 countries. SiriusPoint is expected to be a diversified firm with an attractive business profile and a robust balance sheet.
Upon completion of the deal, Siddhartha Sankaran, who is the newly named non-executive chairman of Third Point Re’s board, will lead SiriusPoint in the dual roles of chairman and CEO.
Siddhartha Sankaran, commenting on Third Point Re, Sirius merger, said: “We are excited to create a powerful new entity that focuses on underwriting first but strives for excellence in its investment results. 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.”
SiriusPoint will also have a reconstituted partnership with Third Point, which at present is the investment manager of Third Point Re. As per the terms, SiriusPoint will get access to a variety of products managed by Third Point, which includes its flagship fund strategy, and also new and existing fixed-income products.
Third Point will also help oversee the investment portfolio allocation of SiriusPoint and a diversified range of third-party traditional asset managers to bring in improved investment returns, while staying within traditional property/casualty reinsurance investment risk parameters.
Daniel S. Loeb – Third Point founder said: “This transaction fulfills our vision to move Third Point Re up the quality curve by adding diversified insurance lines to our existing business, thus improving returns on capital and reducing insurance volatility, expanding our investment strategy from a single manager model to reduce investment volatility, and creating critical mass to support both internal growth and future acquisitions.”