mergers & acquisitions

MS&AD Insurance Group to take stake in W. R. Berkley Corporation

Norbert Gehrke

Norbert Gehrke

— 2 min read
MS&AD Insurance Group to take stake in W. R. Berkley Corporation

Mitsui Sumitomo Insurance (MSI), a subsidiary of MS&AD Insurance Group, is entering into agreements with the founding family of W. R. Berkley (WRB) which entail an investment by MSI in shares of outstanding WRB common stock.

WRB is a Fortune 500 Company and a leader in specialty insurance lines in the commercial and select parts of the specialty consumer space. MSI will enter into agreements with the family, which entail MSI purchasing 15% of the outstanding common stock of WRB and the family recommending to WRB Board’s Nominating and Corporate Governance committee an MSI designee to be elected to the WRB Board of Directors. All common stock will be purchased through open market or private block purchases. The family will not be selling any of its common stock to MSI nor will MSI be purchasing any common stock from WRB. A framework will be in place in the form of a joint vehicle (to be established) to manage the alignment of the voting of the shares subject to the Investment and Voting Agreements. All Agreements will be filed as required by applicable securities law. In line with accounting rules, MSI will reflect its share of WRB’s earnings in its consolidated financial figures.

  • MSI will acquire the WRB common stock on and off the market from third parties over a reasonable time period. MSI cannot acquire 10% or more of WRB’s outstanding common stock absent certain regulatory approvals. The current market cap of WRB is USD 25.1 billion, 15% of which would be valued at approximately USD 3.8 billion.
  • MSI’s designee expected to be nominated by March 2026, subject to MSI’s acquisition of 12.5% of WRB’s outstanding common stock and approval by WRB Board’s Nominating and Corporate Governance Committee, appointment to the WRB Board by the WRB Board and subsequent re-election by shareholders at WRB’s AGM as well as receipt of regulatory approvals.
  • Once MSI acquires 4.9% of the outstanding common stock of WRB, MSI has agreed to vote all of its WRB common stock pursuant to the recommendations of the family, except in limited circumstances.

MSI hopes to benefit from the strengths of WRB as a major player in the U.S. market as a complement to MSI’s strength as a major player in Japan, Asia etc. Through this investment, MSI also hopes to benefit from WRB’s strong earnings and growth while also cooperating to pursue mutually beneficial opportunities that take into account WRB’s specialty insurance underwriting capabilities. This investment is expected to help MSI better diversify its portfolio and risks, strengthen its earnings and raise its capital efficiency. MSI plans to work with the family to further increase the corporate value of WRB thus benefiting both groups.

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