Third Point Reinsurance a specialty reinsurer, and Sirius International Insurance Group, a global multi-line insurer and reinsurer, have announced they have entered into a definitive agreement to combine in a cash and stock transaction.
The transformational transaction will create a global company with approximately $3.3bn (£2.52bn) of tangible capital, to be renamed SiriusPoint.
The firms said the combination joins two “highly complementary” businesses with a shared strategic vision to create a leading global company providing insurance and reinsurance solutions to clients and brokers located in almost 150 countries.
Third Point Re will finance the transaction 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 – and currently Third Point Re’s largest individual shareholder – pursuant to an agreement to purchase approximately $50m (£38m) worth of SiriusPoint shares at closing; and if necessary, other debt or equity financing.
The transaction is expected to be accretive to earnings per share and return on equity in year one following the close.
Third Point Re’s newly named non-executive chairman of the board, Siddhartha Sankaran, a “highly experienced” insurance industry executive, will lead SiriusPoint as chairman and CEO post-closing.
He has been a member of Third Point Re’s Board since August 2019, and is currently the CFO of Oscar Health, and previously served as CFO and chief risk officer of American International Group, Inc.
Third Point Re’s current CEO, Dan Malloy, will remain a senior underwriting executive of SiriusPoint following the closing.
Sankaran 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. I look forward to working with Sirius Group’s terrific and dedicated team.”