Sompo to Acquire Aspen for $3.5 Billion

Core Viewpoint - Sompo Holdings is acquiring 100% of Aspen Insurance Holdings for $37.50 per share in cash, totaling approximately $3.5 billion, which enhances Sompo's portfolio and strengthens its position in specialty insurance and reinsurance markets [2][11]. Group 1: Transaction Overview - The merger agreement involves the redemption of all outstanding Class A ordinary shares of Aspen for cash and their delisting from NYSE, while preference shares will remain outstanding [1][12]. - The transaction is expected to close in the first half of 2026, pending regulatory approvals and customary closing conditions [13]. Group 2: Strategic Benefits - The acquisition diversifies Sompo's portfolio geographically, particularly in high-growth international markets, and enhances its underwriting expertise in core specialty insurance and reinsurance lines [1][5]. - Aspen's expertise in various global reinsurance lines and its top-tier Lloyd's syndicate will provide Sompo access to complex risks and untapped markets [6]. Group 3: Financial Impact - The transaction is anticipated to be immediately accretive to Sompo's return on equity (ROE) post-closing, contributing significantly to the group's financial profile [10]. - Aspen's recent financial performance includes a combined ratio of 87.9% and an operating return on average equity of 19.4% for the twelve months ended December 31, 2024 [10]. Group 4: Premium and Valuation - The acquisition price of $37.50 per share represents a 35.6% premium to Aspen's unaffected share price of $27.66 as of August 19, 2025 [11]. - This premium reflects the quality and potential of Aspen's business as recognized by Sompo [4]. Group 5: Leadership and Integration - Sompo Group CEO Mikio Okumura emphasized the transaction as part of their strategy to enhance resilience and promote collaboration within the group [3]. - James Shea, CEO of Sompo P&C, highlighted that strategic acquisitions are key to building a robust global platform, and Aspen represents a timely opportunity in the market cycle [4].