RenaissanceRe Holdings Ltd. (NYSE:RNR) entered into a stock purchase agreement to acquire Validus Holdings, Ltd., Validus Specialty, Inc. and renewal rights, records and customer relationships of Talbot Holdings Ltd. from American International Group, Inc. (NYSE:AIG) for $3 billion on May 22, 2023. Consideration is subject to adjustment, consisting of cash consideration of approximately $2.735 billion and a number of RenaissanceRe approximately 1.3 million common shares with a value of approximately $250 million. As set forth in the Stock Purchase Agreement and subject to requisite regulatory approvals, AIG is also entitled to cause certain Validus entities to be acquired by RenaissanceRe to pay, prior to the completion of the Validus Acquisition, to AIG entities not being acquired by RenaissanceRe one or more dividends in an aggregate amount equal to the estimated excess tangible book value of all acquired entities above $2.1 billion. The amount of dividend is subject to change based on changes in tangible book value as of the date of the dividend. The cash consideration is expected to be funded through RenaissanceRe available funds and proceeds from the issuance of common equity and debt. In connection with the Validus Acquisition, on May 22, 2023, RenaissanceRe entered into a commitment letter (the ?Bridge Commitment Letter?) with Morgan Stanley Senior Funding, Inc. (the ?Bridge Lender?). AIG to retain Talbot Underwriting Ltd and Western World. The Bridge Commitment Letter provides for a commitment by the Bridge Lender to provide up to $1.55 billion of loans under a 364-day senior unsecured bridge term loan facility to fund a portion of the cash consideration under the Stock Purchase Agreement and to pay related fees and expenses. AIG entitled to receive additional cash consideration over time through value sharing of reserve redundancies that may emerge, as well as net income generated from the business through the closing. RenaissanceRe raised approximately $2.09 billion in net proceeds through the issuance of 7.245 million common shares at $192.00 per share and $750.0 million principal amount of 5.750% Senior Notes due 2033 to finance the acquisition of Validus.

The Validus Acquisition, which is currently expected to close during the fourth quarter of 2023, is subject to customary closing conditions, including, among others, (i) the receipt of certain approvals of regulatory authorities and government-sponsored entities, (ii) the approval for listing of certain shares issued to AIG on the New York Stock Exchange, (iii) the disposition of certain investment assets by certain subsidiaries of AIG and the replacement with investment assets that comply with identified investment guidelines, (iv) the contribution by AIG to certain acquired subsidiaries of an aggregate amount in cash equal to the amount by which the estimated tangible book value of the acquired entities is less than $2.1 billion, if applicable, (v) the consummation of certain restructuring transactions involving certain of the Validus entities, and (vi) the redemption, satisfaction or discharge of certain debt obligations of Validus. The agreement has been approved by RenaissanceRe?s Board of Directors. Transaction is expected to have double digit EPS accretion on run rate basis and expected to be immediately accretive to BVPS and ROE. As of September 1, 2023, European Commission approved the sale of reinsurance business. As of September 5, 2023, Enstar signed an agreement with American International Group, Inc. (?AIG?) to provide AIG with protection against adverse development on the portion of Validus Re?s loss reserves. The adverse development cover is expected to become effective at the time of closing of AIG?s sale of Validus Re to RenaissanceRe.

Sidley Austin LLP and Morgan Stanley acted as legal counsel and financial advisor, respectively, for RenaissanceRe. Evercore Group L.L.C. and J.P. Morgan Securities LLC acted as financial advisors, and Wachtell, Lipton, Rosen & Katz and Marilyn A. Lion and Timothy McIver of Debevoise & Plimpton LLP acted as legal counsel for AIG. Paul Hastings LLP is advising Morgan Stanley on its $1.55 billion of committed bridge financing for RenaissanceRe?s $2.985 billion acquisition of Validus Re. Computershare Shareowner Services LLC acted as transfer agent for RenaissanceRe Holdings Ltd. Peter Hsu and Laura Widmer of Bär & Karrer served as legal advisor to RenaissanceRe. Gavin Woods, Jay Webster, Michael Hanson JP and Michelle Falcucci of Carey Olsen LLP acted as legal advisors to RenaissanceRe. Oxbow Partners acted as integration consultant to RenaissanceRe.

RenaissanceRe Holdings Ltd. (NYSE:RNR) completed the acquisition of Validus Holdings, Ltd., Validus Specialty, Inc. and renewal rights, records and customer relationships of Talbot Holdings Ltd. from American International Group, Inc. (NYSE:AIG) on November 1, 2023.