White Mountains gives green light for $1.7bn sale of OneBeacon to Intact
Insurance group White Mountains has agreed to sell OneBeacon Insurance Group to Intact Financial Corporation, Canada's largest provider of property/casualty insurance, for approximately $1.7 billion. White Mountains owns 75.7 percent of OneBeacon's outstanding common shares.
Intact Financial will acquire all the outstanding shares for $18.10 in cash per share, which is 1.65 times OneBeacon's book value per share as of March 31, 2017. It represents a 14 percent premium to the company's closing stock price on the NYSE of $15.89 as of May 1, 2017 and a 15 percent premium to the volume weighted average share price over the last 30 days, according to the statement.
White Mountains has agreed to vote in favour of the transaction, which is expected to close in the fourth quarter of this year.
OneBeacon debt of approximately $275 million will remain outstanding. It expects to continue paying regular quarterly dividends consistent with past practice prior to closing.
The company said that the deal will create a North American specialty insurer with more than $1.5 billion of annual premiums. It will further bolster Intact's Canadian business with new products and cross-border capabilities, and better position the company to compete with North American insurers.
Mike Miller, CEO of OneBeacon, said: "We are all very excited to join the Intact family. The opportunity to leverage Intact's deep technical, financial and technology capabilities makes this combination the perfect next step in the OneBeacon journey.
"Together, we will accelerate our pursuit in creating a leading specialty insurer in North America. We look forward to working with our US and Canadian independent agents and brokers to deliver market-leading capabilities to our targeted customers. Both companies are dedicated to ensuring a seamless transition and look forward to profitably growing our specialty portfolio going forward."
Charles Brindamour, CEO of Intact, commented: "Today, we've taken an important step in building a world-class P&C insurer. The addition of OneBeacon is creating a leading North American specialty lines insurer focused on small-to-midsize businesses.
“OneBeacon is a strong strategic fit for Intact, with deep expertise in commercial and specialty lines, and shared values. We see significant growth potential from the combination of our specialty lines operations and we look forward to welcoming OneBeacon employees to the Intact family."
OneBeacon was formed in 2001 when White Mountains Insurance Group acquired the former CGU's US property/casualty business from Aviva.
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