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Arch Capital Group to buy Watford Holdings

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London: Arch Capital Group has entered into a definitive agreement to acquire all of Watford Holdings common shares in an all-cash deal valued at approximately US$622 million (around £477.5 million).

“Under the terms of the agreement, Watford shareholders will receive US$31.10 in cash for each Watford common share they hold,” detailed Arch, which currently owns approximately 13% of Watford’s outstanding shares.

“This consideration represents a premium of approximately 74% to Watford’s unaffected closing common share price on September 08, 2020, the last trading day prior to media reports about the possibility of a transaction between Watford and Arch.”

For Watford president and chief executive Jon Levy, the sale signifies “a clear path forward” for the property and casualty (re)insurer, whose operating subsidiaries’ financial strength ratings were placed under review with negative implications by A.M. Best in May.

Levy, who sees the transaction as delivering an attractive premium to shareholders, added: “We believe that Watford will be better positioned as a standalone business within Arch to execute its strategic priorities and growth plans.

“Importantly, we expect a seamless transition for our clients, trading partners, and policyholders, who we think will benefit from Watford becoming part of a larger organisation with greater resources.”

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