New York-based insurance holding companies Alleghany Corporation (the parent of RSUI Group, Capitol Transamerica Corporation and Pacific Compensation) and Transatlantic (whose subsidiaries include Transatlantic, Trans Re and Putnam Reinsurance) have entered into an agreement under which Alleghany will acquire Transatlantic for approximately $3.4 billion.
Transatlantic had been looking for a buyer for some time, with Validus and Berkshire Hathaway among its suitors. Transatlantic will remain an independent stand-alone subsidiary of Alleghany.
"After a thorough and deliberate review, our Board of Directors unanimously concluded that partnering with Alleghany delivers immediate value to our stockholders while providing a unique and compelling opportunity to create long-term value by combining the strength of the Transatlantic franchise and balance sheet with Alleghany’s leading U.S. specialty insurance platform and superior investment track record," Transatlantic chairman Richard Press says in a statement. "The companies are complementary with virtually no overlap in their underwriting operations and have highly compatible cultures, which we believe will make integration seamless and efficient."
After closing, former General Re chief executive Joseph Brandon, will take over as president of Alleghany Insurance Holdings LLC (AIHL), EVP of Alleghany, AIHL’s parent company, and chairman of Transatlantic’s Board. Michael Sapnar will stay on as Transatlantic’s president and will become CEO effective January 1, following the retirement of Robert Orlich. Orlich will stay on Transatlantics board and as a senior advisor.
“This transaction is an outstanding opportunity to create significant value for Alleghany and Transatlantic stockholders alike, as the unique and complementary strengths of our leading specialty insurance and reinsurance platforms provide all the ingredients necessary for superior performance,” Weston Hicks, president and CEO of Alleghany, says in a statement. "We welcome Joe and Mike, two talented executives with long records of success and unmatched knowledge of our industry, to our leadership ranks.”