General and commercial insurance provider Chaucer Holdings PLC recently announced it has reached an agreement for its sale to a US based insurer for $510 million (£308 million).
Massachusetts-based Hanover Group has purhcased Chaucer Holdings in order to tap into international growth opportunities, stated Frederick H. Eppinger, chief executive for the American firm. Hanover offers casualty and professional indemnity insurance through an extensive network of independent agents throughout the US and is one of the 25 biggest insurance providers for property and casualty in the country.
While the firm currently has no substantial international operations outside of its home country in either the general or business insurance markets, nearly 20 per cent of the company’s business will be international once the deal is finalised.
Since Chaucer does business across the globe, Mr Eppinger stated that the deal will expand opportunities for the insurer while reducing its risk from major US disasters by granting the firm more geographic diversity.
Part of the Lloyds network of insurance providers, Chaucer had approximately £785 billion in sales in 2010. Based in London, Chaucer’s primary focus is providing insurance for energy, aviation, and shipping firms.
Chaucer had been courted by several different buyers with lucrative offers. However it said that Hanover came knocking with the highest bid, which dovetailed nicely with a substantial proportion of its major investors giving their stamp of approval towards the completion of the deal. However 10 per cent stake holder Pamplona Capital Management LLP, the largest holder of shares in Chaucer, has stated it will be rejecting the deal.
Peter Hewer, spokesman for Pamplona, stated that the price is too low for the investor’s tastes, which has led to the decision that they will not be accepting the offer.