Swiss Re says it has completed the purchase of General Electric's insurance solutions unit to create the world's largest reinsurer.This content was published on June 12, 2006 - 15:03
The deal, which was announced last November, puts Swiss Re ahead of German rivals Munich Re and gives it a commanding position in the United States.
The Swiss company said on Monday it expected cost synergies of at least $300 million (SFr371 million) a year, to be realised within the next 18 months.
"The acquisition of GE Insurance Solutions consolidates further Swiss Re's global leadership position," Swiss Re chief executive Jacques Aigrain said in a statement.
"We will now move swiftly to integrate GE Insurance Solutions and build on the benefits of an enlarged client base and expanded product offerings."
Swiss Re is paying $7.4 billion in cash and securities plus $1.7 billion in assumed debt for the unit, which has 2,500 employees in 22 countries.
As part of the transaction, General Electric will hold a nine per cent stake in the Zurich-based company.
Swiss Re has previously said it would cut about 1,500 jobs as part of the takeover, but offices in Switzerland are unlikely to be affected.
It has a workforce of 8,900 around the world.
GE Insurance Solutions offers reinsurance and commercial insurance products and services to insurance companies, corporations and professionals.
The federal authorities approved the transaction in May saying the acquisition of GE Insurance Solutions would not threaten the liquidity of Swiss Re.
Company shareholders earlier in the year approved the creation of additional capital to finance the deal.
swissinfo with agencies
Reinsurance is basically the business of insuring the insurers. Swiss Re insures large or very volatile risks for other insurance companies. Its major competitor is Munich Re of Germany.
Apart from being one of the world's leading reinsurers, Swiss Re is the world's largest life and health reinsurer.
Swiss Re has been in the business of reinsurance since it was founded in Zurich in 1863.
The deal with GE Insurance Solutions will bring Swiss Re's estimated combined revenues to SFr46 billion and assets of SFr265 billion (as of June 2005).
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