Sompo (8630) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition accelerates growth strategy, positioning the group as a top 10 global reinsurer and expanding scale in insurance and reinsurance markets, including reentry into Lloyd’s and access to 80+ new markets.

• Diversifies the portfolio geographically, expanding presence in high-growth international and specialty insurance lines, and deepens broker and client relationships.

• Enhances underwriting expertise and provides access to significant fee-based income through a leading capital markets platform.

• Complements existing business, especially in specialty lines, and accelerates growth in North America, the UK, and developed markets.

• Supports a shift from stable to high-growth, high-profit assets and aligns with long-term strategic targets for profit and market cap.

Financial terms and conditions

• All-cash acquisition of 100% of Aspen Insurance Holdings for $3.48 billion ($37.50 per share), representing a 35.6% premium to the unaffected share price and 1.32x tangible book value.

• Funded with cash on hand; Aspen preference shares remain outstanding with unchanged terms post-closing.

• Transaction unanimously approved by both Boards and Aspen's majority owner; written consent received from Apollo Global Management affiliates.

• Transaction expected to close in the first half of 2026, subject to customary regulatory approvals.

• Price equates to less than 8x forward earnings and 24.6% premium over the 30-day VWAP.

Synergies and expected cost savings

• Over $200 million in annual run-rate cost savings targeted by 2030, mainly from systems integration, operational efficiencies, and overlapping functions.

• One-off integration costs of $200 million expected.

• Synergies expected from expense ratio improvements, capital policy, and capital-light, fee-based income.

• Significant cost and capital synergies identified, expected to enhance capital optimization and reduce earnings volatility.

• Aspen’s alternative reinsurance platform expected to provide greater flexibility in risk management.