White Mountains Group To Sell Sirius To CMI
White Mountains Insurance Group, Ltd. [WTM] has signed a definitive agreement to sell Sirius International Insurance Group, Ltd.[Sirius] to CM International Holding PTE Ltd., the Singapore-based investment arm of China Minsheng Investment Corp., Ltd. [CMI].
The purchase price will be paid in cash in an amount equal to 127.3% of Sirius’s closing date tangible common shareholder’s equity plus $10 million. Based on Sirius’s tangible common shareholder’s equity of$1,748 million at December 31, 2014, the purchase price would be approximately $2,235 million.
White Mountains has the option to replenish Sirius’s tangible common shareholder’s equity to its December 31, 2014 level should it be below that level at closing. White Mountains expects that the transaction will increase its adjusted book value by approximately $65 per share, subject to Sirius’s interim results through closing.
White Mountains Chairman and CEO Raymond Barrette commented, “This is a win-win-win transaction. Sirius is a high quality reinsurer with a strong franchise and a great track record.
“The acquisition by CMI recognizes this value and opens doors for Sirius to new opportunities in Asia, especially China. We wish Allan Waters and his Sirius team continued success, as they become the reinsurance arm of CMI. Thank you for your great results over many years.”
Barrette continued, “Net of the OneBeacon and Symetra positions to be repurchased by White Mountains from Sirius in connection with the transaction, our undeployed capital is expected to increase by $1.4 billionto about $2 billion. The board will carefully review the additional capital management options available to the Company when proceeds have been received.”
CMI is a Shanghai-domiciled investment company founded in May 2014. Centered on industrial integration and developing into a global financial holding company, CMI is fully committed to strategically investing in financial services and upgrading industrial businesses. At December 31, 2014, CMI had over $6 billion of shareholders’ equity.
Sirius writes worldwide property and casualty reinsurance and insurance through its affiliates Sirius International Insurance Corporation, Sirius America Insurance Company, Lloyd’s Syndicate 1945 and Sirius Bermuda Insurance Company Ltd. In addition, Sirius provides exit solutions for run-off companies and their portfolios through its subsidiary, White Mountains Solutions, Inc.
Allan Waters, CEO of Sirius, said, “The Sirius management team is excited to be joining the CMI family. CMI is strongly capitalized and intends to further grow Sirius’s already substantial capital base. China is one of Sirius’s most important markets, and CMI is the perfect partner for Sirius to continue its Asian growth strategy.”
The transaction is expected to close within six months. It is subject to regulatory approval and other customary closing conditions.
J.P. Morgan Securities LLC acted as lead financial advisor to White Mountains with Willis Capital Markets & Advisory also acting as financial advisor. Cravath, Swaine & Moore LLP served as legal advisor to White Mountains.
White Mountains is a Bermuda-domiciled financial services holding company traded on the New York Stock Exchange and the Bermuda Stock Exchange under the symbol WTM.
