XL Group in preliminary talks to acquire Catlin

Dublin-based XL Group plc confirmed Wednesday that it is in preliminary talks with Catlin Group Ltd. to potentially acquire the company and form a combined entity.

“Both XL and Catlin – respected, innovative, global P&C firms – are well positioned on their own,” XL’s CEO Mike McGavick said in a statement issued Wednesday.

“However, we both believe that we will be far better positioned and stronger together. We see this transaction as deeply accelerating the strategies of both companies.

“Specifically, the combined entity would be a leader in the global specialty and property cat markets and would make greater and more efficient use of both companies’ global networks and infrastructure,” he said.

“As Catlin is the leading presence at Lloyd’s, the combination would immediately expand many of the lines of business in which XL has recently invested. In the increasingly competitive reinsurance market, the combined company would be a top 10 player, thereby increasing alternative capital opportunities and overall relevance to clients and brokers. The proposed transaction is expected to result in attractive economics starting in the first year and long-term value for shareholders.

“For these reasons, and crucially, for the deep cultural and strategic alignment we see between XL and Catlin, with both built on disciplined underwriting, we see meaningful opportunity in this transaction.”

The transaction would require approval by each company’s board of directors, and various regulatory and shareholder approval. XL noted that “there can be no assurance that a transaction will result from these discussions, nor can there be any certainty as to the terms on which any such transaction might proceed.”