- RenaissanceRe Holdings (NYSE:RNR) agrees to buy Tokio Marine Holdings' (OTCPK:TKOMF) reinsurance platform, Tokio Millennium Re AG and Tokio Millennium Re (NASDAQ:UK).
- Tokio Marine will receive 1.02x the tangible book value of TMR delivered to RNR at closing.
- If closing tangible book value is unchanged from June 30, 2018, Tokio Marine would receive about $1.5B total consideration--$1.22B of cash and $250M of RNR common shares.
- RNR expects the deal to immediately add to book value per share, tangible book value per share, operating EPS, and operating return on equity.
- Sees deal closing in H1 2019.
- Tokio Marine has agreed to provide RenaissanceRe a $500M adverse development cover that will protect TMR’s stated reserves at closing, including unearned premium reserves.
- In addition, State Farm Mutual Automobile Insurance Company has agreed to invest $250M in RenaissanceRe through its purchase of RenaissanceRe’s common shares in a private placement. The shares purchased by State Farm will be valued at today's closing price of $128.37 per share.
- State Farm will own about 4.8% of RNR's total common shares outstanding.
- Previously: RenaissanceRe beats by $0.27, misses on net premiums written (Oct. 30)