AIG to Sell Validus Re to RenaissanceRe

30 May 2023 —
AIG announced that it has entered into a definitive agreement to sell Validus Re, including AlphaCat and the Talbot Treaty reinsurance business, to RenaissanceRe Holdings Ltd. for USD 2.985 billion, consisting of USD 2.735 billion in cash and USD 250 million in RenaissanceRe common shares.

In addition, AIG will receive all capital in excess of USD 2.1 billion of shareholders' equity of Validus Re and achieve future capital synergies of approximately USD 400 million from the recapture of reserves as a result of transferring the Validus Re balance sheet to RenaissanceRe, which together, as of December 31, 2022, was over USD 1.5 billion.

The total estimated transaction value is expected to exceed USD 4.5 billion.

AIG will retain Talbot Underwriting and Western World, which were purchased as part of its 2018 acquisition of Validus Holdings Ltd. and which currently represent approximately USD 1.6 billion of AIG's total gross premiums written. On May 2, 2023, AIG announced that it reached an agreement to sell Crop Risk Services, also purchased as part of the 2018 acquisition of Validus Holdings Ltd. in 2018, to American Financial Group, Inc. for USD 240 million; this transaction is expected to close in the third quarter of 2023.

The sale of Validus Re is expected to close in the fourth quarter of 2023, subject to regulatory approvals and other customary closing conditions. Following the closing, AIG expects to make significant investments in RenaissanceRe's DaVinci Reinsurance and Fontana Re managed funds through AIG's Investment portfolio.

Evercore Group L.L.C. and J.P. Morgan Securities LLC acted as financial advisors, and Wachtell, Lipton, Rosen & Katz and Debevoise & Plimpton LLP acted as legal counsel for AIG.