Meadowbrook Insurance Group Acquired by China’s Fosun International
Fosun International (“Fosun”), a Chinese conglomerate whose shares are listed on the Hong Kong Stock Exchange, has agreed to acquire Meadowbrook Insurance Group, Inc.. Under the agreement Fosun will acquire the Michigan-based company for $8.65 per share in cash or approximately $433 million dollars.
The deal which was inked on December 30, 2014, represented a 24% premium over Meadowbrook’s closing price on December 29, 2014 and a 39% premium over the company’s three-month average closing price for the period ending December 29, 2014. According to the company’s announcement the transaction also represents a multiple of approximately 1.04 times Meadowbrook’s tangible book value per share as of September 30, 2014.
“This transaction allows Fosun to establish a presence in the important U.S. P&C market, consistent with our strategy of expanding our core insurance business.” Guo Guangchang, Chairman of Fosun. “Meadowbrook has a talented employee base, comprehensive offering of high-quality specialty insurance products, robust distribution network and a strong commitment to meeting the evolving needs of its policyholders. The transaction represents another milestone for Fosun and will enable Fosun to further strengthen its insurance-oriented comprehensive financial capabilities.”
Founded in 1955, Meadowbrook Insurance Group focuses on three segments of the specialty insurance marketplace: insurance carrier operations, insurance services, and retail/wholesale insurance agency operations. Its insurance company operations focuses on programs and specialty excess & surplus line written through six insurance carriers that are licensed on both an admitted and non-admitted basis in all 50 states.
Founded in 1992 and based in Shanghai, Fosun International is a leading investment group with over $50 billion in total global assets and operations. The company, which has more than one third of its total assets in insurance business around the world, sees its acquisition of Meadowbrook Insurance as a way to establish a significant presence with the U.S. Property & Casualty marketplace. Fosun’s 47-year old founder, Guo Guangchang, has explicitly built the company on the insurance model of Warren Buffet’s Berkshire Hathaway where insurance operations provide cash for acquisitions. Fosun sees its investment in the development of insurance operations”…as a major approach to access long-term high-quality capital.”
The transaction which was unanimously approved by all of the Meadowbrook directors, Meadowbrook will continue to operate with the same name and out of its same location in Southfield, Michigan.
Robert S. Cubbin, President and Chief Executive Officer of Meadowbrook, said, “Combining with Fosun further strengthens our capital base as we continue to focus on supporting the needs of our customers, partners and policyholders, improving our underwriting performance and driving profitability.”
Mr. Cubbin continued, “This transaction is the culmination of a thorough strategic review process to maximize shareholder value. We believe this is a positive outcome for our shareholders, who will receive significant value; our employees, who will benefit from enhanced opportunities as part of a larger, global organization; and our customers, partners and policyholders, who will benefit from an even stronger specialty risk, insurance and service provider.”
More About Fosun International Limited
The following information comes directly from Fosun’s marketing materials:
Fosun was founded in 1992 in Shanghai. Fosun International Limited (00656.HK) was listed on the Main Board of The Stock Exchange of Hong Kong Limited on 16 July 2007. Today, Fosun has established four business engines comprising “insurance, industrial operations, investment and asset management”. It strives to become a world-class investment group underpinned by the twin drivers of “insurance-oriented comprehensive financial capability” and “industrial-rooted global investment capability”. It is dedicated to applying the value investing principle to its investment model of “Combining China’s Growth Momentum with Global Resources”.