Transatlantic Holdings and Allied World Assurance Company have signed of a definitive merger agreement to create a global specialty insurance and reinsurance company.
The combined entity will have total invested assets of $21bn, total shareholders’ equity of nearly $7bn, and total capital of $8.5bn.
The combined company will operate under a holding company structure with the corporate name TransAllied Group Holdings, AG, offering specialty insurance and reinsurance products and services via two distinct brands – Transatlantic Reinsurance and Allied World Insurance.
The deal is structured as a merger of equals, with shareholders of Transatlantic receiving 0.88 Allied World common shares for each Transatlantic common share held, according to a statement.
Following the merger, Transatlantic shareholders will own approximately 58% of the combined company on a fully diluted basis, with Allied World shareholders owning approximately 42%.
Once the deal is completed, Scott Carmilani, chairman, president and chief executive of Allied World Assurance Company Holdings, AG, will serve as the president and chief executive of the new company, with overall responsibility for the global organization.
Mike Sapnar, executive vice president and chief operating officer of Transatlantic, will serve as president and chief executive, Global Reinsurance.
Both Carmilani and Sapnar will serve on the combined company’s board of directors, which will have 11 seats, six appointed by Transatlantic and five by Allied World.
Richard Press, Transatlantic’s non-executive chairman, will serve as the non-executive chairman of the board of directors for the combined company for the first year following the closing of the merger to provide stewardship during the integration process.
Robert Orlich, president and chief executive of Transatlantic, who will retire upon the closing of the transaction, said: “Transatlantic and Allied World make great merger partners in every sense of the term. For Transatlantic in particular, the transaction delivers strategic and financial benefits, including primary insurance operations, a Lloyd’s presence and a bigger capital base outside the US, allowing for greater capital allocation flexibility.
"I look forward to helping see this transaction through to completion, after which Scott and Mike are the right team to move this forward and capitalize on the great opportunity for the new company to create value for shareholders.”