Reinsurance solutions provider PartnerRe Ltd. (PRE) Sunday agreed to acquire all the outstanding shares of Swiss rival Paris Re Holdings Ltd. in a multi-step all-stock deal valued at about $2.0 billion, including a $310 million cash distribution by Paris Re. The deal is subject to PartnerRe shareholders approving the issuance of new shares to Paris Re shareholders as well as obtaining regulatory approvals and the listing of PartnerRe shares on Euronext Paris. The completion of the deal would see Paris Re along with its operating subsidiaries being fully integrated into PartnerRe's existing operating structure.
In a statement, PartnerRe president and chief executive officer, Patrick Thiele said, "This is an important acquisition for PartnerRe and provides us the opportunity to enhance our already successful franchise. The greater market presence, risk diversification, capital strength and scale that is created will provide more balance and stability to our Company in the face of uncertain and volatile financial and reinsurance markets."
Paris Re was created in 2006 by a consortium of private equity funds led by Trident III, a fund managed by Stone Point Capital LLC, by acquiring all of the active business of AXA RE. The proposed merger of PartnerRe with Paris Re would form the world's fourth largest reinsurer, with about $5.4 billion in gross written premiums and $23 billion in total assets. The world's top three reinsurers are Munich Re, Swiss Re, and the reinsurance operations of Warren Buffett led Berkshire Hathaway (BRKa, BRKb).
Recently, Pembroke, Bermuda-based PartnerRe acquired about 6% of Paris Re's outstanding common shares in a stock-for-stock transaction whereby PartnerRe exchanged 0.30 of its common shares for each Paris Re common share outstanding. PartnerRe will now acquire an additional 57% of Paris Re's outstanding common shares at the same exchange ratio, mainly from its private equity investors, held by several significant shareholders like Stone Point Capital, Hellman & Friedman, Vestar Capital Partners, Crestview Partners, New Mountain and Caisse de Dépôt et Placement du Québec.
Pursuant to the closure of the 57% block purchase, which is expected to close in the fourth quarter of 2009, Paris Re expects to distribute $310 million or $3.85 per common share in cash as a return of capital to its shareholders. PartnerRe would also then commence a voluntary public exchange offer for all of the remaining Paris Re common shares not owned by PartnerRe at the same 0.30 exchange ratio.
For the voluntary public exchange offer, shareholders holding about 6% of Paris Re's outstanding shares have agreed to tender into the offer. This step of the deal, the voluntary public exchange offer, is expected to close in the first quarter of 2010.
Finally, on receipt of at least 90% of Paris Re's outstanding shares, PartnerRe intends to acquire any remaining shares through a compulsory merger under Swiss law at the same 0.30 exchange ratio.
"We are convinced that the combination of PARIS RE and PartnerRe will create one of the premier global reinsurance operations. In an uncertain world, scale and diversification coupled with unquestioned financial strength and full dedication to effective risk management are the key ingredients to success in our industry. This combination is clearly a 'win win' transaction for our clients and our shareholders and should offer attractive opportunities to the employees of PARIS RE," chief executive officer of Paris Re, Hans-Peter Gerhardt added.
PartnerRe noted that the consideration payable at different stages of the deal could be subject to adjustment up or down if the parties' relative tangible book values diverge significantly prior to the closing of the block purchase. Further, the number of PartnerRe shares payable for each Paris Re share in the exchange offer and the merger will be adjusted upwards to account for any dividends declared by PartnerRe having a record date following the closing of the block purchase and prior to the settlement of the exchange offer.
For PartnerRe, Greenhill & Co., LLC and UBS Investment Bank served as financial advisers, and Davis Polk & Wardwell LLP provided legal counsel for the deal. For Paris Re, Credit Suisse acted as sole financial adviser, and Sullivan & Cromwell LLP and Homburger provided legal counsel. Meanwhile, Simpson Thacher & Bartlett LLP provided legal counsel to the significant shareholders participating in the block purchase.
In late April, PartnerRe reported a first-quarter profit that improved from the year-ago quarter despite lower revenues. Net income was $141.5 million or $2.32 per share, higher than $129 million or $2.16 per share in the year-ago quarter. Quarterly revenues declined to $1.02 billion from $1.07 billion last year.
PRE closed Friday's regular trading session at 64.60, down $1.31 or 1.99% on a volume of 0.45 million shares, lower than the three-month average volume of 0.83 million shares. In the past 52-week period, the stock has been trading in a range of $47.70 to $76.96.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.