Sompo confirms Endurance deal; kick-starts ‘overseas transformation’

Sompo Holdings has confirmed that it has entered into a definitive agreement for the acquisition of 100 percent of the outstanding ordinary shares of Endurance Specialty Holdings, in  a deal that could be finalised by March 2017.

The aggregate purchasing price is ¥637.5 billion ($6.3 billion), representing a 40.3 percent premium to Endurance's closing share price on 3 October 2016 and approximately a 41.6 percent premium to the average share price over the last three months.

The deal represents another example of a large Japanese insurer making acquisitions to diversify away from the domestic market. It follows the acquisition of HCC Insurance by Tokio Marine & Nichido Fire last year among other deals.

Sompo’s rationale behind the deal is to significantly expand its overseas insurance business, while delivering growth and improvement in return on equity for its shareholders, Kengo Sakurada, president and CEO of Sompo, said.

"Today's agreement marks the beginning of Sompo's overseas transformation which undoubtedly enhances the quality and reach of our insurance services. Endurance brings strength in the primary insurance business in developed markets,” he said.

"Endurance also brings a highly experienced executive team led by one of the world's leading P&C CEOs in John Charman. Mr Charman, and certain shareholders associated with Mr Charman, representing in the aggregate approximately 4.9 percent of Endurance ordinary shares, have agreed to vote in favor of the proposed transaction.

"This acquisition will be integral in helping Sompo realize its goal of providing insurance and related services of the highest quality which contribute to the security, health and wellbeing of its customers."