PartnerRe to acquire Paris Re

PartnerRe Ltd. has inked a US$2-billion,‘multi-step transaction’ that will see it acquire Paris Re Holdings Limited.
In the first step of the transaction, expected to close in 2009 Q4, PartnerRe will acquire the shares held by several significant shareholders — including Stone Point Capital and Caisse Depot et Placement du Quebec — representing approximately 57% of Paris Re’s outstanding common shares, a Paris Re release says.
Following the block purchase, PartnerRe intends to commence a voluntary public exchange offer on all outstanding shares of Paris Re not then owned by PartnerRe. The exchange is expected to close in 2010 Q1.
Once PartnerRe attains 90% ownership, it intends to acquire any remaining shares through a compulsory merger under Swiss law, the release continues.
The transaction is subject to, among other things, PartnerRe shareholders approving the issuance of new shares to be given as consideration to Paris Re shareholders, obtaining relevant regulatory and anti-trust approvals and the listing of PartnerRe shares on Euronext Paris, the release adds.
Commenting on the transaction, A.M. Best Co. says that PartnerRe’s financial strength rating of A+ (Superior) is unchanged, with a stable outlook for its ratings.
“Paris Re maintains a strong balance sheet with the majority of its invested asset base held in fixed income securities of solid credit quality,” an A.M. Best release says.
“Paris Re’s loss reserves prior to accident year 2006 are guaranteed… which somewhat mitigates the typical risks of acquiring an insurance company’s liabilities.”