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The combined Axis Capital-PartnerRe may displace
France's Scor as the world's fifth largest reinsurer. It will
have gross premiums topping $10 billion, a total capitalization
of more than $14 billion, and cash and invested assets of more
than $33 billion, PartnerRe said in a statement.
Reinsurers are being squeezed by price competition and subdued
demand from insurers for their products, and traditional mergers
may still not be enough to save those that lack either global
reach or a specialized focus.
"It's all about achieving scale in an industry where demand is
declining and pricing is reducing," Canaccord Genuity analyst
Ben Cohen said. "Scor has been active in M&A and may look to
respond to consolidation in the market."
Partner Re has a market capitalization of about $5.6 billion,
while Axis Capital's market cap is about $5 billion, according
to Thomson Reuters data.
PartnerRe shareholders will get 2.18 shares of the combined
company's common shares for each PartnerRe share. Axis Capital
shareholders will get one share for each Axis share they own.
The terms mean PartnerRe shareholders will own 51.6 percent of
the merged company and Axis holders 48.4 percent, the statement
said.
Axis Capital Chief Executive Albert A. Benchimol will serve as
CEO of the combined company, which will have 14-member board
with seven Axis Capital directors and seven PartnerRe directors.
Reinsurers help insurers pay large damage claims, in exchange
for part of the profit.
Net income at the top 31 reinsurers rose to $14 billion in the
first six months of 2014, up 12 percent from the same period the
prior year.
(Reporting by Luc Cohen in New York and Jonathan Gould in
Frankfurt; editing by Jeffrey Benkoe and David Clarke)
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