US-based property and casualty insurer Liberty Mutual Insurance has agreed to acquire the global surety and credit reinsurance operations of AmTrust Financial Services for an undisclosed price.
The acquisition by Liberty Mutual will cover four AmTrust businesses – AmTrust Surety, AmTrust Insurance Spain, Nationale Borg and Nationale Borg Reinsurance (NBRe).
The deal is said to help Liberty Mutual’s target of becoming a top three global commercial (re)insurer.
AmTrust Surety is engaged in providing contract, commercial, and subdivision bonds mainly in the Western US. AmTrust Insurance Spain provides surety bonds in Spain and Latin America.
Nationale Borg, on the other hand, offers surety, worker disability, and home purchase bonds in the Netherlands and Belgium, while Nationale Borg Reinsurance (NBRe) offers surety, trade credit and political risk reinsurance across the world.
Liberty Mutual global risk solutions president Dennis Langwell said: “The transaction will further enhance our strong global surety and reinsurance expertise, market leadership, and geographic footprint.
“Once the transaction closes, we’ll integrate the acquired operations into our current structure.”
According to Liberty Mutual, the AmTrust Surety part of the acquisition is anticipated to be completed in the second quarter of 2019, while the acquisition of the AmTrust Insurance Spain, Nationale Borg, and NBRe businesses are likely to be closed in the second half of 2019. The closing of the acquisitions will be based on receipt of regulatory approvals and meeting of customary closing conditions.
For AmTrust, the transaction is a major step in its strategic plan to position itself for long-term success.
AmTrust chairman and CEO Barry Zyskind said: “Earlier this year, we announced our plan to become a leading specialty commercial P&C insurer by focusing on local markets and niche products where we can add significant value.
“The agreement with Liberty Mutual enables us to focus our resources in areas where we can differentiate ourselves through the value we bring to distribution partners and buyers.”
On the transaction Skadden, Arps, Slate, Meagher & Flom served as legal advisor to Liberty Mutual Insurance.
Bank of America Merrill Lynch acted as financial advisor to AmTrust in connection with the transaction, and Debevoise & Plimpton was legal counsel.
Last month, the company entered into a deal to sell the Pembroke Managing Agency platform at Lloyd’s and the Ironshore Europe DAC (IEDAC) business to Hamilton Insurance Group for an undisclosed price.