RenaissanceRe acquires Tokio Millennium Re in $1.5B deal

RenaissanceRe announced Wednesday it will acquire Tokio Marine’s reinsurance platform, which includes Tokio Millennium Re AG and Tokio Millennium Re (UK) Limited (collectively, “TMR”).

RenaissanceRe announced the terms of the deal, in which Tokio Marine will receive 1.02 times the tangible book value of TMR delivered to RenaissanceRe at closing.

In their announcement, RenaissanceRe representatives explained that if the closing tangible book value is unchanged from June 30, 2018, Tokio Marine would receive approximately $1.5 billion in total consideration, consisting of cash and RenaissanceRe common shares.

RenaissanceRe expects that upon closing the transaction will be immediately accretive to book value per share, tangible book value per share, operating earnings per share and operating return on equity. The transaction agreement has been unanimously approved by the Boards of Directors of both companies, and is expected to close in the first half of 2019.

State Farm invests $250M

In addition, RenaissanceRe announced that State Farm has agreed to invest $250 million in the company through its purchase of RenaissanceRe’s common shares in a private placement, following termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

The shares purchased by State Farm will be valued at today’s closing price of $128.37 per common share. When the investment is finalized, State Farm will own approximately 4.8% of RenaissanceRe’s total common shares outstanding. State Farm also has investments in RenaissanceRe-managed vehicles including Top Layer Reinsurance Ltd. and DaVinciRe Holdings Ltd.

Related: People on the move in the P&C insurance industry: Oct. 26, 2018