Reinsurance (August 01, 2009)

PARTNER RE TO ACQUIRE PARIS RE HOLDINGS

PartnerRe Ltd. has inked a US$2-billion,’multi-step transaction’ that will see it acquire Paris Re Holdings Limited.

In the first step of the transaction, expected to close in 2009 Q4, PartnerRe will acquire the shares held by several significant shareholders — including Stone Point Capital and Caisse Depot et Placement du Quebec — representing approximately 57% of Paris Re’s outstanding common shares, a Paris Re release says.

Following the block purchase, PartnerRe intends to commence a voluntary public exchange offer on all outstanding shares of Paris Re not then owned by PartnerRe. The exchange is expected to close in 2010 Q1.

The transaction is subject to regulatory and anti-trust approvals and the listing of PartnerRe shares on Euronext Paris, the release adds.

EL NIO’S ARRIVAL MAY SUPPRESS ATLANTIC HURRICANE ACTIVITY

El Nio has arrived, potentially suppressing hurricane activity in the Atlantic Ocean, scientists at the National Oceanic and Atmospheric Administration (NOAA) say.

El Nio is the periodic warming of central and eastern tropical Pacific waters. It occurs on average every two to five years, and typically lasts for about 12 months.

The most recent El Nio event occurred in 2006, a time of relatively fewer catastrophe claims paid out by North American insurers.

The NOAA says this current round of El Nio is expected to last through winter 2009-10.

“On the positive side, El Nio can help to suppress Atlantic hurricane activity,” NOAA said in a press release announcing El Nio’s arrival. “In the United States, it typically brings beneficial winter precipitation to the arid Southwest, less wintry weather across the North and a reduced risk of Florida wildfires.”

On the flip side, however, “El Nio’s negative impacts have included damaging winter storms in California and increased storminess across the southern United States,” NOAA says. “Some past El Nios have also produced severe flooding and mudslides in Central and South America, and drought in Indonesia.”