XL Group To Buy Catlin Group For $4.1 Billion

January 9, 2015

XL Group today [Jan 9] announced that it has entered into an agreement under which XL will offer to acquire all of the capital stock of Bermuda-based Catlin Group Limited to form a combined business to be known as XL Catlin, with the deal worth approximately $4.1 billion dollars.

The transaction is structured as a scheme of arrangement and is expected to close mid-2015, subject to approval of Catlin shareholders and sanction by the Supreme Court of Bermuda, customary regulatory approvals and anti-trust clearances, and other customary closing conditions.

Following the completion of the transaction, the name of the parent company of the combined group will remain XL Group plc, and the newly combined company will be marketed as XL Catlin, reflecting the strong reputation of both brands.

XL CEO Mike McGavick commented: “We are delighted to announce this compelling combination which positions us strongly to provide more – and even better – answers for the world’s most complex risks while enhancing our opportunities to create value for shareholders and better serve clients and brokers.

“We believe the transaction will accelerate each company’s strategy, and address the meaningful structural changes we see shaping the P&C sector. Specifically, the combination will add immediate scale in specialty insurance, it will create a more efficient and more capable global network by bringing our two infrastructures together, and it creates a top 10 reinsurer with expanded alternative capital capabilities.”

Mr. McGavick continued, “This is an extraordinary opportunity to bring together two innovators with roots in disciplined underwriting, industry leadership and business vision, and strong cultural alignment. I am especially pleased that Stephen Catlin will continue on with the combined company and, on closing of the acquisition, is expected to serve on our Board.

“We will benefit enormously from Stephen’s input in all strategic decisions and through our ability to leverage his vast market network as we implement the strategy of the new combined company. With the combination of our talented teams, we expect to maintain strong financial fundamentals while generating attractive economics and long-term value for shareholders including double-digit EPS and meaningful ROE accretion.”

Catlin CEO Stephen Catlin said, “XL is a compelling partner for the Catlin business. Both businesses have been built on underwriting excellence and benefit from strong cultural compatibility. Together, the combined entity will be a market leading global specialty and property catastrophe insurer which will be far better positioned to respond to the changing dynamics that are impacting the broader insurance and reinsurance markets.

“We expect the enlarged business to benefit from increased diversification, significant further economies of scale, strengthened franchises in each of its markets and an improved standing with intermediaries. As a result, XL Catlin will be better equipped to serve its clients across a range of distribution channels and geographies with an enhanced suite of capabilities and products.”

Mike McGavick will continue as CEO and it is expected that Stephen Catlin will join the combined company as Executive Deputy Chairman upon the closing of the transaction.

There is a website here with transaction details, and the 13-page announcement is below [PDF here]:

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Comments (9)

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  1. Ian says:

    Looks like more job losses on the way to blame on the PLP!

    • Jo Blo says:

      Not really a laughing matter as there are likely to be actual job losses resulting from this.

    • wow says:

      How is the PLP at blame for the merger? That’s a very harsh statement. I also hope there aren’t too many job losses from the merger.

      • Ian says:

        Called sarcasm mate… Directly as those who still use the PLP as their boogey mate for all that is wrong on this island.

    • Ricko Chez says:

      Ian: But surely all the job losse will be expats? You moan about Bermudians not getting jobs in the international sector.

      Either way, not PLP’s fault or OBA’s. Just good business sense.

      • Ian says:

        Actually Catlin is very much Bermudianized even amongst the underwriting staff… Beyond that support staff (like Cat modelers), operations and admin. Dont think I have ever “moaned” about Bermudians not getting jobs in IB. IB has been VERY good to Bermudians.

  2. cicada says:

    How will this affect Catlin’s philanthropic endeavors, such as the lcoal Bermuda End-to-End and the international Catlin-Google Seaviewer project?

  3. Bermuda says:

    Interesting…

  4. wonder woman says:

    probably want to cut loose and focus on THE AC and see if the “players” will scoop up all the contracts