Sompo Holdings to acquire Aspen Insurance for $37.50 per share in cash

Sompo Holdings (SMPNY) announced that a wholly owned subsidiary of Sompo International Holdings, has entered into a definitive merger agreement pursuant to which it will acquire 100% of the issued Class A ordinary shares of Aspen Insurance Holdings Limited (AHL) for $37.50 per share in cash. This represents aggregate consideration of approximately $3.5B. Aspen brings a leading specialty insurance and reinsurance franchise with more than $4.6B in annual gross written premiums centered around specialty product lines and bespoke solutions. Sompo is executing a strategic plan focused on achieving adjusted consolidated ROE of 13-15% and adjusted EPS growth of above 12% in FY2026. Aspen has taken significant action over the past few years to streamline its portfolio, reduce volatility, and drive financial performance. Further Aspen has enhanced the resilience of its balance sheet through a loss portfolio transfer and adverse development cover for the 2019 and prior accident years. As a result of these steps, Aspen is expected to be immediately accretive to ROE and make a significant contribution to the Sompo Group. For the twelve months ended December 31, 2024, Aspen delivered a combined ratio of 87.9% and operating return on average equity of 19.4%. Sompo has identified significant cost and capital synergies as a result of this transaction. Under the terms of the merger agreement, each issued Class A ordinary share of Aspen will be converted into the right to receive $37.50 in cash at closing. This consideration represents a 35.6% premium to the unaffected share price of $27.66 on August 19, 2025, as well as a 24.6% premium over Aspen’s unaffected 30-day volume-weighted average price as of August 19, 2025, the last full trading day prior to speculation about the transaction. Immediately following the closing, each series of preference shares of Aspen will remain outstanding and the relative rights, terms and conditions will remain unchanged. Sompo and Aspen may from time to time seek to redeem or repurchase and/or delist the preferred shares or associated depositary shares. The transaction has been unanimously approved by both companies’ Boards of Directors and is expected to close in the first half of 2026. The transaction is subject to certain customary closing conditions for a transaction of this type, including the receipt of antitrust and insurance regulatory approvals, consents and expiration of applicable waiting periods. Following the execution of the merger agreement, shareholders representing more than a majority of the issued common shares of the Company delivered a shareholder written consent adopting and approving the merger agreement.