Mon, Jan. 26, 12:25 PM
- Lack of scale has never been the problem at Axis Capital (AXS +5.4%), say Citigroup's Todd Bault and James Kaklick. The current issue is low demand, they say, and a merger with PartnerRe (PRE +1%) won't solve that.
- Noting the merger is being done at "no premium" (presumably to book value), the two say this deal and others in the industry are acts of necessity, rather than strategic opportunities. "The pressure to cut even more costs will be enormous given the lack of significant deal premiums."
- The team reiterates its Sell rating and $46 price target on Axis.
- More on the terms: PartnerRe owners will receive 2.18 shares in the combined company for each share they own, and Axis shares will convert on a one-to-one basis.
- A check of others in the industry: ACE Limited (ACE +0.1%), XL Group (XL +0.4%), Everest Re (RE +0.7%), RenaissanceRe (RNR +0.9%), Aspen Insurance (AHL +0.9%), Arch Capital (ACGL +0.2%), Reinsurance Group of America (RGA -0.6%), Montpelier Re (MRH +0.3%), Unum Group (UNM +0.1%).
- Previously: Axis Capital to merge with PartnerRe (Jan. 26)
Jul. 7, 2014, 7:51 AM
- ACE Limited is paying $685M for the corporate P&C insurance business of Itau Unibanco's (ITUB) Itau Seguros . Upon closing, ACE will be the largest P&C insurer in Brazil.
- In 2013, the company had about $950M in gross premiums and an 18% market share. It has about 320 employees and relationships with over 600 brokers.
- Already with a presence in Brazil, ACE's operations there include an established commercial and personal P&C business, an accident and health insurance business, along with life and reinsurance. The deal is expected to be completed in 2015 Q1 and be immediately accretive to earnings.
- Source: Press Release
Sep. 8, 2011, 10:45 AM
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