ACQUISITION OF VALIDUS

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

ACQUISITION OF VALIDUS

ACQUISITION OF VALIDUS

On November 1, 2023, the Company completed the Validus Acquisition in accordance with the Stock Purchase Agreement, dated May 22, 2023 (as amended, the “Stock Purchase Agreement”), between RenaissanceRe and American International Group, Inc., a Delaware corporation and NYSE-listed company (together with its affiliates and subsidiaries, “AIG”), pursuant to which, upon the terms and subject to the conditions thereof, RenaissanceRe,or one of its subsidiaries, purchased, acquired and accepted from certain subsidiaries of AIG, all of their right, title and interest in the shares of certain direct and indirect subsidiaries of AIG, including Validus Holdings, Ltd. (“Validus Holdings”), and Validus Specialty, LLC (“Validus Specialty”). Substantially all of the assets of Validus Holdings is comprised of its equity interest in its wholly-owned subsidiary, Validus Reinsurance, Ltd. (“Validus Re”). The Company also acquired the renewal rights, records and customer relationships of Talbot Underwriting Ltd., an affiliate of AIG (“Talbot”), a specialty (re)insurance group operating within the Lloyd’s market. The acquisitions under the Stock Purchase Agreement, together with the other transactions contemplated in the Stock Purchase Agreement, are referred to herein as the “Validus Acquisition” and Validus Holdings, Validus Specialty, and their respective subsidiaries (including Validus Re) collectively are referred to herein as “Validus.”

In connection with the Validus Acquisition, on November 1, 2023, the Company paid to AIG aggregate consideration of $2.985 billion, consisting of the following: (i) cash consideration of $2.735 billion; and (ii) 1,322,541 common shares, which were valued at approximately $250.0 million based on a value of $189.03 per share at signing, pursuant to the Stock Purchase Agreement (the “Base Common Share Consideration”). The Company also entered into a registration rights agreement with AIG in respect of the Base Common Share Consideration. AIG also has the option to make a substantial investment into the Company’s Capital Partners vehicles.

As set forth in the Stock Purchase Agreement, AIG caused certain Validus entities to be acquired by the Company to pay, prior to the completion of the Validus Acquisition, to AIG entities not being acquired by the Company, 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 Stock Purchase Agreement also includes a reserve development arrangement on net reserves acquired at closing such that AIG retains 95% of the risk and reward on the development of in-force reserves.

The transaction will be accounted for as a business combination. The Company is currently estimating the impact of the Validus Acquisition on its financial statements as of the date the financial statements were issued, and expects these estimates to be further refined during the purchase accounting measurement period. The Company has concluded that, due to the limited amount of time since the date of this transaction, in accordance with the accounting guidance, it is impracticable to provide all of the disclosures required for a business combination at the time of this filing.