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Reinsurers in deal
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March 31, 1997: 7:36 a.m. ET
PartnerRe will acquire French reinsurer for $950 million
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NEW YORK (CNNfn) -- PartnerRe Ltd. on Monday announced that it had reached a definitive stock purchase agreement to acquire a European reinsurance firm from Swiss Reinsurance Co. for $950 million.
PartnerRe, a Bermuda reinsurer, will acquire Paris-based Societe Anonyme Francaise de Reassurances for about $800 million in cash and 6.45 million in PartnerRe common shares.
As the insurance industry has become increasingly competitive, there has been a flurry of consolidation. The acquisition would put PartnerRe in fifth place among the world's best-capitalized reinsurers.
Reinsurers enter into contracts with insurers who sell policies to individuals and businesses. Under these agreements, reinsurers agree to shoulder part of the risk, allowing insurers to spread out financial responsibility in the event of a claim.
Swiss Re would own 79 percent of the outstanding shares of Societe Anonyme Francaise de Reassurances (SAFR) after completing the acquisition of the aggregate holdings of SAFR held by Assurances Generales de France and French insurance group Athena, the company said.
Swiss Re would then begin a cash tender offer for the remaining SAFR shares held by the public, the company said. PartnerRe said it would acquire all the SAFR shares owned by Swiss Re after that.
The acquisition will diversify PartnerRe from its current focus of volatile risk policies for natural disasters. SAFR deals with more everyday policy reinsurance, such as automobile policies.
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Swiss Reinsurance Co.
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