In a move that has sent shockwaves through the financial sector, Zurich Insurance has unveiled a proposal to acquire London-listed specialty insurer Beazley in a deal worth approximately £7.7 billion. The Swiss insurance giant has tabled a potential offer of £12.80 per share, representing a significant 56% premium on the value of Beazley’s shares prior to the proposal’s announcement.
The latest approach from Zurich marks an increase from an earlier, undisclosed offer of £12.30 per share made on January 4, which was swiftly rejected by Beazley’s board. However, the new proposed price of £12.80 per share has been welcomed by the market, with Beazley’s shares soaring to an all-time high, up 42% in afternoon trading on Monday.
Zurich believes that the proposed acquisition would create a global leader in specialty insurance, with combined gross written premiums of around $15 billion (£11.2 billion). The Swiss insurer has highlighted the potential benefits of combining Beazley’s Lloyd’s of London presence with its own exceptional data availability, underwriting expertise, and leading market and distribution capabilities.
In a statement, Zurich said: “The transaction would create a global leader in specialty insurance with around 15 billion US dollars (£11.2 billion) of gross written premiums, exceptional data availability and underwriting expertise, leading market and distribution capabilities and outstanding reinsurance and technology infrastructure.”
Beazley, a specialist insurer with a strong presence in cyber coverage, as well as professional indemnity, property, marine, reinsurance, accident and life, and political risk and contingency business, has acknowledged the proposal but stated that it has “not yet had the chance to consider” the improved approach. The company has promised to update its shareholders “in due course.”
The proposed takeover comes as Zurich seeks to bolster its position in the global specialty insurance market. The deal, if successful, would represent a significant strategic move for the Swiss insurer, as it looks to leverage Beazley’s expertise and market presence to enhance its own capabilities.
Investors and industry analysts will be closely monitoring the developments, as the potential combination of these two major players in the specialty insurance space could have far-reaching implications for the broader market.
