Swiss Re finalizes acquisition of GE Insurance Solutions

Swiss Reinsurance Co. has acquired GE Insurance Solutions for US$7.4 billion. Swiss Re expects to finish integrating GE into the fold about 18 months following the June 2006 acquisition.

The deal means Swiss Re would surpass Munich Re to become the world’s largest resinsurer.

Swiss Re announced plans to purchase GE Insurance Solutions on Nov. 18, 2005. Between that time and the close of the deal in June 2006, the value of GE increased by US$1.7 billion. Swiss Re reimbursed GE for this increase through “cash capital contribution” and earnings GE made prior to closing.

Swiss Re financed the transaction through cash, an at-market rights issue, mandatory convertibles and hybrid debt.

With the transaction now closed, Swiss Re says it will commence integration of GE Insurance Solutions by merging “function and teams.” Swiss Re says this will lead to an overall reduction of office locations as well as staff reductions in a number of locations.

Swiss Re says it expects to capture cost synergies of at least US$300 million per year, to be realised by the end of 2007.