Fairfax Financial acquires Brit for $ 1.88 Billion

Fairfax Financial acquires Brit for $ 1.88 Billion

Fairfax Financial acquires Brit for $ 1.88 Billion

Fairfax Financial Holdings of Canada announced to buy Brit, the specialty insurer, for $ 1.88 Billion in cash deal.

 This deal came almost year after Brit went public and was valued about $ 1.6 Billion, or more precisely £ 960 Million by echange rate at the time.

 Brit is Lloyd’s of London insurance market member.

 Under the terms of deal, shareholders would receive £ 3.05 in CASH for each share of Brit, including 2014 dividend . It’s 11.2 percent premium to Brit’s closing price on Monday. In early Tuesday trading in London shares of Brit rose 10 percent to £3.02.

 “Brit has an outstanding track record over the last 10 years and will continue to operate on a decentralized basis once owned by Fairfax,” Prem Watsa, Fairfax’s chairman and chief executive, said in a news release late Monday. “With the acquisition of Brit, Fairfax will have a significant top five position at Lloyd’s of London.”

As part of the Fairfax deal, Apollo and CVC managed entities have agreed to irreversible liabilities to accept the offer. Those entities hold a combined stake of about 73 percent of Brit’s shares.

 “Brit’s board is pleased to recommend the combination with Fairfax, which I believe will bring us significantly closer to realizing our strategy of building the leading global speciality (re)insurer,” Richard Ward, Brit’s chairman, said on Tuesday in a news release. “Our two businesses are highly complementary and the proposed deal provides both groups with an exciting opportunity to deliver our respective growth ambitions.”

The transaction is subject to regulatory approval. Shares of Fairfax closed 1.1 percent higher at 642 Canadian dollars in Toronto on Monday.

Mr. Stakebay says:

 This deal helps Fairfax Financial to expand it’s presence in the Lloyd’s marketplace and help diversify its risk portfolio and focusing on specialty insurance and reinsurance for businesses.

FAIRFAX FINANCIAL

BRIT

Revenue

$ 6.036 Billion (2013)

£ 1.018 Billion (2013)

Operating income

$ 5.944 Billion (2013)

£ 126.6 Million (2013)

Profit

$ – 564.5 Million (2013)

£ 101.7 Million (2013)

Total assets

$ 35.958 Billion (2013)

£ 3.630 Billion (2013)

Total Equity

$ 8.460 Billion (2013)

£ 687.4 Million (2013)

Employees

 8 200 (2013)

390 (2013)

 

CHAIRMAN and CEO of FAIRFAX  ………..V. PREM WATSA…………..1985 – present…………$ 623 820 (2013)

CEO of BRIT…………………………………..MARK CLOUTIER…………..2011 – present………£ 1 679 537 (2013)

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