China Reinsurance acquires Chaucer Group in USD 950 mln deal
Sep 14, 2018 (China Knowledge) - China Reinsurance will acquire Chaucer Group from The Hanover Insurance Group in a USD 950 million deal. The deal consists of USD 865 million in cash considerations and a USD 85 million pre-signing dividend.
The total consideration, adjusted for the pre-signing dividend, represents 1.66 times Chaucer’s tangible equity of USD 520 million as of end of June this year. Chaucer had a pre-tax operating income of USD 7.1 million in 2017 from net written premium of USD 849.1 million with a combined operating ratio of 105.3%.
The acquisition comes as part of a plan for China Reinsurance to develop its international presence. Yuan Linjiang, chairman of China Re told the press that Chaucer’s established market leading position combined with China Re’s access to capital will improve their core competitiveness and gain a better standing in the international market.
China Re reports a registered capital of USD 6.2 billion. 12.72% is held by the Ministry of Finance of the People’s Republic of China and another 71.56% is held by Central Huijin Investment LLC. It ranks first in Asia and eight globally in terms of reinsurance premium.
The deal is subject to regulatory approvals from the Prudential Regulation Authority, Lloyd's of London, the regulatory entities of the People's Republic of China and from China Re's shareholders.
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