SCOR to Buy Transamerica Reâ€™s Mortality Business
Transamerica Re is part of AEGON, but not as a legal entity. Therefore, the acquisition includes a series of retrocession agreements from AEGON to SCOR Global Life US entities.
As part of the acquisition, SCOR will also purchase from AEGON one Irish legal entity, which underwrites Transamerica Re business.
AEGON will transfer to SCOR E1.2 billion ($1.8 billion) of liabilities and corresponding assets in cash and/or securities in line with SCORâ€™s investment policy.
The total consideration for the acquired business amounts to approximately E630m ($912.5m). It includes an estimated statutory capital of around1 E340m ($497m) for the Irish entity. The transaction will be financed by SCOR through the use of own funds and a potential limited debt issuance, without the issuance of any new shares.
The transaction is fully in line with the Strong Momentum profitability and solvency targets, and is not expected to impact the Groupâ€™s rating.
This acquisition will significantly enlarge the global footprint of SCORâ€™s life reinsurance business. SCOR will benefit from Transamerica Reâ€™s leading market position in the US, with its strong biometrics focus and very limited franchise overlap.
With the acquisition of a major mortality risk reinsurance portfolio in the US, SCOR aims to further increase its geographical diversification, in line with the strategy it has been following for several years.
Denis Kessler, chairman and CEO of SCOR, said: â€œThis transaction relates only to biometric risks, and is fully consistent with SCORâ€™s strategy and risk appetite. The rebalancing of the Life reinsurance book between the US, Asia and Europe, while enlarging the groupâ€™s footprint and significantly expanding our global franchise, will also provide additional stability to the group.
â€œThis transaction will be financed through own funds and a potential limited debt issuance, without the issuance of new shares. It satisfies the Groupâ€™s profitability criteria and is expected to create value for SCORâ€™s shareholders. This transaction paves the way towards a fruitful and long-lasting partnership with AEGON over the next fifteen years.â€
Will the acquisition strengthen SCOR's market position in the US?
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