Peak Re, a global reinsurer based in Hong Kong, has announced that a wholly-owned subsidiary of US-headquartered Prudential Financial (PFI) has signed definitive agreements to purchase a minority stake in Peak Reinsurance Holdings, the sole and direct shareholder of Peak Re via an issuance of new shares.
The transaction marks a further step in the long-term strategic partnership between Fosun International, the largest beneficial shareholder of Peak Re, and PFI (which does business as Pramerica in selected countries outside the US), one of the largest insurance groups globally. Fosun and PFI also jointly own and operate a life insurance joint venture in China.
In the run-up to the transaction, the shares of Peak Re Holdings held by International Finance Corporation, a member of the World Bank Group, were purchased by Fosun, in view of IFC’s continuing focus on emerging markets and Peak Re’s emergence as a globally diversified reinsurer with strong positions in developed markets including the Americas and Europe.
The final consideration is subject to closing adjustments. Following the closing of the deal, Fosun and PFI will hold 86.9% and 13.1% of Peak Re via Peak Re Holdings, respectively.
The transaction is subject to customary closing conditions and completion of regulatory procedures with relevant regulators.
Meanwhile, A.M. Best has commented that the credit ratings of Peak Re (Hong Kong) and its reinsurance subsidiary, Peak Re AG (Switzerland), remain unchanged following the announcement of the deal with PFI.
The international rating agency expects that the new capital injected by PFI through the deal will be used to support continued business growth and maintain a risk-adjusted capitalisation supportive of Peak Re’s current ratings. Peak Re also may benefit from PFI’s global insurance expertise and profile in the long run.