Shares in insurance group Aspen Insurance Holdings (AHL) soared 14% in early trading after agreeing to be snapped up by Japan’s Sompo Holdings for $3.5 billion.
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Specialty Provider
Aspen is a specialty insurer and reinsurer working in areas such as the environment, ocean marine, cyber, crisis management, and U.S. property.
The work includes transport pollution liability, shipyard cover for builders, kidnap & ransom and terrorist and political violence cover.
Sompo has offered $37.50 for each share of the U.S. firm, which is majority-owned by Apollo Capital Management (APO), representing a 35.6% premium to Aspen’s unaffected share price.
Apollo, which holds an 82% stake in Aspen Insurance, took the company public earlier this year after taking it private in 2019 for $2.6 billion. The company’s valuation hit a little over $3 billion on its debut day.
Aspen Insurance Holdings recently reported strong financial results for the second quarter of 2025, with a net income of $36 million and operating income of $111 million. It showed an improvement in its combined ratio and significant growth in fee income from Aspen Capital Markets.
However, as seen above, it has trailed its peers share price movement so far this year.
Westward Push
The deal, expected to close by the middle of next year, aims to expand Sompo’s geographic spread and enhance its specialty insurance underwriting business.
Sompo intends to integrate Aspen’s business with its overseas insurance business to pursue further expansion opportunities across developed markets such as the U.S. and U.K.
James Shea, CEO of Sompo P&C (Property & Casualty), said, “Strategic acquisitions have been a key part of our growth plan to build a robust and diversified global P&C platform, and Aspen represents an excellent opportunity at the right time in the market cycle. The property/casualty market continues to value platforms that can underwrite and manage capital and risk at scale – and with exceptional skill.”
The deal is a further example of Japanese companies setting their sights on Western firms given dwindling growth in the domestic financial market.
Some other recent deals include Nippon Life Insurance buying Resolution Life Group Holdings for about $8.2 billion and Nomura’s (NMR) decision to acquire Macquarie Group’s (MCQEF) U.S. and European public asset management businesses for $1.8 billion.
“The domestic pond is over-fished with an aging population and decades of thin yields, so they’re buying durable, dollar-denominated cash flows and fee businesses abroad,” said Michael Ashley Schulman, partner and CIO at Running Point Capital and reported by Reuters.
Is AHL a Good Stock to Buy Now?
On TipRanks, AHL has a Moderate Buy consensus based on 6 Buy and 3 Hold ratings. Its highest price target is $45. AHL stock’s consensus price target is $39.78, implying an 8.48% upside.
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