EC approves RenRe’s $3bn Validus takeover

The European Commission has approved the $3bn sale of Validus Re to RenaissanceRe, finding the sale does not raise any competition concerns under EU merger regulations.

The Commission announced it had reached the decision on 30 August after it launched an investigation earlier that month into any potential competition concerns caused by the merger.

The investigation was carried out under the Commission’s so-called simplified merger procedures, which is designed to fast-track merger investigations in cases where the merging firms are not operating in the same or related markets, or have only very small market shares.

The simplified merger procedure was introduced in 2000 to expedite cases by reducing the amount of information that has to be provided to the Commission and enabling notifying parties to secure merger clearance more quickly

The deal for RenaissanceRe to acquire Validus Re from AIG for $2.985bn was announced in May and is expected to close in the fourth quarter of 2023.

The consideration for the sale represents a valuation of 1.42x book and the sale includes AlphaCat Managers and its managed funds, as well as the renewal rights of the assumed reinsurance treaty unit of Talbot.

However, AIG is retaining Talbot Underwriting and Western World, which were purchased as part of its 2018 acquisition of Validus Holdings.

The businesses retained represent around $1.6bn of AIG’s total gross written premiums.

Both AIG and RenRe announced in May the $3bn takeover transaction, which cements the Bermudian carrier’s position as a top five global P&C reinsurer.