Early 2015 has seen key deals take place as the insurance sector consolidates, with Canada’s property and casualty insurer Fairfax Financial Holdings being the latest to gain a significant presence in London with its takeover of speciality insurer Brit for £1.2bn.
Within a year of being listed on the London Stock Exchange, FTSE 250 insurer Brit turned to a Slaughter and May team, including corporate heavyweight Jeff Twentyman and Richard Smith, while Paul, Weiss, Rifkind, Wharton & Garrison’s London-based capital markets and securities practice head Mark Bergman represented Brit on US law.
Shearman & Sterling’s team, including London-based M&A partners Jeremy Kutner and Laurence Levy, acted for Fairfax, which used the deal to gain a presence in the Lloyd’s underwriting market.
Brit shareholders, the largest of which is Apollo with a 39.7% stake, will receive 305p comprised of 280p in cash and a final dividend of 25p. Apollo was advised by Sullivan & Cromwell’s team led by corporate partners Tim Emmerson and Ben Perry.
According to one London-based partner, future UK insurance targets for acquisition include global speciality insurer Lancashire Holdings and City-headquartered Novae Group.
Fairfax’s deal followed on from the XL Group takeover of insurance firm Catlin Group for $2.8bn, which also saw Slaughters instructed. That team, which advised Catlin, included corporate partners Martin Hattrell and Simon Nicholls.
Debevoise & Plimpton also advised Catlin, led by partners Nicholas Potter and Alexander Cochran, while Skadden, Arps, Slate, Meagher & Flom’s team – corporate partners Todd Freed, Scott Hopkins and Robert Stirling – covered the UK and US law aspects for XL.
‘People are looking to reduce costs but increase the scale for greater leverage and negotiation with insurance brokers,’ said Stirling. ‘There is a reasonable prospect that this trend will continue, though the scope for consolidation in Europe is greater on the life sciences side.’
jaishree.kalia@legalease.co.uk