Mitsui Sumitomo assumes a lot with Amlin swoop 8 Sep 2015 The Japanese insurer is paying 3.5 billion stg for the second-biggest insurer in London’s Lloyd’s market. Paying a big premium for already well-valued overseas assets is becoming a national trend in Japan. Mitsui will need punchy synergies to hit its target’s cost of capital.
Novo Banco has issues – Chinese owner or not 2 Sep 2015 Insurer Anbang is no longer in line to acquire the bailed-out Portuguese bank. Yet given rival Chinese group Fosun remains in the race, Chineseness is unlikely to be the problem. Any buyer for Novo Banco needs to get comfortable with its uncertain capital and litigation bills.
Zurich buys protection with 5.6 bln pound RSA bid 25 Aug 2015 The Swiss insurer has made a 550 pence-per-share indicative offer for its UK peer. At that price, it could achieve a 10 pct return with fairly undemanding cost savings. Twitchy markets may help Zurich clinch a deal that both sides’ shareholders can argue is a fair result.
Aegon gives peek at insurers’ new capital gremlins 13 Aug 2015 The Dutch insurer’s shares slumped after it adjusted down its estimated capital ratio under new Solvency II rules. Before the new metrics go live next year, more insurers could unearth nasty surprises. Even after, capital positions are set to be more volatile.
UK death-insurance merger makes future less morbid 11 Aug 2015 Partnership and Just Retirement are combining in an all-share deal. The business of offering annuities to high-risk customers got smacked by regulatory shifts in 2014, and both trade below 2013 listing prices. Cost savings make things better, but the sector is still in flux.
Buffett’s $37 bln Castparts deal lacks precision 10 Aug 2015 The Oracle’s Berkshire Hathaway is paying 19 times earnings for aircraft components maker Precision Castparts. The acquisition fits Buffett’s mold, but also coincides with cyclical highs in plane orders, stock valuations and M&A. Even for a long-term investor, the timing is odd.
Allianz takes Pimco’s fall from grace in stride 7 Aug 2015 With assets under management and profit falling, the German insurer’s Pimco arm is still reeling from boss Bill Gross’ acrimonious exit. But Allianz can ride it out. Its insurance division and a growing in-house asset manager mean it can stick to full-year targets.
Zurich can justify a swoop on RSA 6 Aug 2015 The Swiss insurer released disappointing results but thinks its UK peer remains a good fit. Zurich’s hurdle rate for investment is around 10 percent. Offering 600p a share for RSA, a 36 pct premium, should allow that without synergy assumptions being too ambitious.
Agnellis rebalance portfolio – at a price 3 Aug 2015 The Italian family’s Exor vehicle has won the fight for PartnerRe with a $6.9 bln bid after the reinsurer’s board finally switched sides. Three months of bolshie resistance paid off, and Exor boss John Elkann is paying handsomely to diversify away from Fiat Chrysler Automobiles.
Zurich should look hard before it leaps at RSA 28 Jul 2015 The Swiss insurer wants to invest free capital rather than give it back to shareholders. UK-based RSA, at 5 bln stg, is an attainable target. But Zurich Insurance might first examine the disastrous 1996 deal that created the company formerly known as Royal & Sun Alliance.
Agnellis nudging PartnerRe out of rival’s reach 20 Jul 2015 Exor, the Italian family’s investment vehicle, has a better offer for the Bermudan reinsurer than Axis. Common shareholders would get more money, in cash, and preferred stockholders extra assurances. A last-minute counter by Axis would hurt its and PartnerRe’s investors.
Puerto Rico woes come with systemic silver lining 8 Jul 2015 Fears that the commonwealth will default on its debt have whacked bond insurers’ shares. Unlike 2008, though, the likes of MBIA and Assured Guaranty now back only a small fraction of the markets they operate in. That should prevent too much pain spreading beyond their walls.
Agnellis jump through hoops to woo PartnerRe 7 Jul 2015 Family scion John Elkann is offering his quarry’s preferred shareholders a higher dividend and a pledge to restrict payouts to his own Exor. That should curb fears of Fiat or other group holdings hurting reinsurer PartnerRe’s credit – if investors take Elkann’s word as his bond.
Aetna’s bitter Humana pill is good long-term care 3 Jul 2015 The two U.S. healthcare insurers struck a $37 bln deal ahead of rivals in a race to consolidate an industry rapidly reshaping under Obamacare. Cost savings will fall short of the premium Aetna is offering. It may be a price worth paying to be first in line with trustbusters.
ACE aims to defy history with $28 bln Chubb deal 1 Jul 2015 The Swiss insurer is buying its upscale U.S. rival. Cost and tax savings don’t cover the premium, implying ACE believes in promised revenue gains, also touted in the Willis-Towers Watson merger this week. The failed 1999 marriage of Provident and Unum, though, provides a warning.
Willis-Towers Watson insure against market turmoil 30 Jun 2015 The insurance broker and the risk consultant plan to merge. There’s positive logic: combining Towers’ knowhow and Willis’ client relationships could drive revenue. But $125 mln of cost synergies would also help the group weather an insurance sector wrestling with low rates.
Rob Cox: Don’t underestimate Exor’s John Elkann 23 Jun 2015 Fiat Chrysler CEO Sergio Marchionne is the one leading a coercive charm offensive for car industry consolidation, but it wouldn’t be happening without the Agnelli scion’s support. Exor’s hostile bid for PartnerRe signals a hard-nosed approach that GM and others shouldn’t dismiss.
Health insurer M&A is risky Obamacare side effect 15 Jun 2015 Cigna rebuffed Anthem’s $45 bln offer while mulling a $32 bln bid for Humana. The urge to merge is a predictable attempt to boost profit after the controversial law clamped down on premiums. With only five big insurers, though, any deals will get a thorough antitrust checkup.
Judge humbles Greenberg and Uncle Sam in one shot 15 Jun 2015 The former AIG boss proved the insurer’s $182 bln rescue was technically illegal, yet the government owes him no money. What can probably be spun as a victory for both sides will surely please neither. The reality is that huge egos have finally been cut down to size.
Tokio Marine learning lessons in value destruction 10 Jun 2015 The 38 pct premium the Japanese insurer is paying in its $7.5 bln purchase of HCC is only half as absurd as in its two previous U.S. deals. Those extravagant forays should give it scope to cut costs. By slicing 15 pct of HCC’s overhead it might even finally make a deal stack up.