RenaissanceRe to Purchase Platinum Underwriters in $1.9B DealRenaissanceRe Holdings Ltd., a provider of reinsurance, insurance and other related business services, and Platinum Underwriters Holdings Ltd., Bermudian provider of property, casualty and finite risk, reinsurance coverages, through reinsurance intermediaries, announced that the companies have entered into a definitive merger agreement under worth at 1.9 billion which RenaissanceRe will acquire Platinum.
The deal values Platinum at $76 a share, 24 percent more than its closing price on Nov. 21, RenaissanceRe said in a statement today. The buyer will pay 7.5 million of its shares and about $1.16 billion in cash, according to the statement.
RenaissanceRe Chief Executive Officer Kevin O’Donnell will expand in sales of reinsurance for casualty and specialty lines of coverage. That will diversify a company that mostly sells property-catastrophe reinsurance against events such as hurricanes.
“This is a big strategic surprise for a company like RenRe, but confirms the structural pressures in its core property-cat business,” Josh Stirling, an analyst at Sanford C. Bernstein & Co. said today in a research note. “RenRe will no longer be a focused pure play on the property-cat business.”
RenaissanceRe slipped 2.7 percent to $98.76 at 4:15 p.m. in New York, erasing most of its gain for the year. Platinum rallied 21 percent to $74.19.Source: Businessweek