Fairfax Financial Holdings Ltd (FFH.TO: Quote,FRFHF.PK), a Canadian financial services holding company, said Monday that its RiverStone runoff subsidiary has entered into an agreement with Amsterdam-based Brit Insurance Holdings NV to buy Brit Insurance Limited of London, England. The purchase price would be about $300 million, subject to certain adjustments at closing.
RiverStone will buy privately held Brit Insurance Limited at a discount to its book value, adjusted for certain pre-closing dividends. The company expects to close the deal in the fourth quarter, subject to customary conditions including regulatory approval. The acquisition is expected to be financed using internal resources at RiverStone.
Brit Insurance Limited, the FSA regulated insurance company, wrote UK domestic, as well as some international, insurance and reinsurance before being placed into runoff earlier this year, the company said.
In April, Brit Insurance agreed to sell its non-core regional UK business to QBE Insurance (Europe) Limited as it continues with its transformation into a more focused major specialty reinsurer at Lloyd's and globally. At that time, the company had stated that Brit Insurance Limited will be retained within Brit Group while it undertakes a strategic review of options for its future.
As of March 31, 2012, Brit Insurance Limited's gross and net reserves were approximately $1.9 billion and $1.3 billion, respectively. Its cash and invested assets were about $1.9 billion, and its book value was approximately $530 million.
Prem Watsa, Chairman and Chief Executive Officer of Fairfax, said, "We think that this is an excellent acquisition by Nick Bentley and his experienced team at RiverStone. We continue to look for opportunities to grow profitably in the runoff area."
In late May, Fairfax Financial, through its Fairbridge Capital subsidiary, agreed with UK-based Thomas Cook Group plc to buy 77 percent interest in Thomas Cook (India) Limited for 50 Indian rupees per share for a total cost of 8,174 million rupees or about $150 million. In January, 7948883 Canada Inc. , a subsidiary of Fairfax Financial, acquired Canada-based Prime Restaurants Inc.
Fairfax Financial shares closed Friday's trading at C$390.02, down C$4.63 or 1.17 percent in Canada.
| || |
| To receive FREE breaking news email alerts for Fairfax Financial Holdings Ltd and others in your portfolio|
by RTT Staff Writer
For comments and feedback: email@example.com