Brookfield to buy Argo in $1.1 billion transaction

Brookfield Reinsurance and Argo Group International have announced they have entered into a definitive merger agreement whereby Brookfield Reinsurance will acquire Argo in an all-cash transaction valued at approximately $1.1 billion.

Sachin Shah, chief executive of Brookfield Reinsurance, said the acquisition represented another “milestone” in the company’s continued expansion. 

“Argo’s leading US specialty platform adds a foundational piece to our expanding US P&C operations,” he said. ”We look forward to partnering with the Argo team to support the growth of its core businesses, build on its strong franchise, and deliver value for policyholders.”

Thomas Bradley, Argo’s executive chairman and chief executive, added: “This transaction brings a successful conclusion to Argo’s strategic alternatives review process and represents the best path forward for Argo, our employees and policyholders while also maximising value for our shareholders. 

”By joining Brookfield Reinsurance, Argo will continue to serve our brokers with greater financial strength and opportunities to grow as a US-focused specialty insurer.”

Each of Brookfield Reinsurance’s and Argo’s boards of directors unanimously approved the merger agreement, which is expected to close in the second half of 2023, subject to approvals.

Finality after international exit

In recent years, Argo has announced a series divestitures to exit international businesses and focus on more profitable business lines. 

In May 2022, AM Best affirmed Argo’s A- (Excellent) rating but lowered its BCAR score, citing material adverse loss reserve development.

Then in June, the group announced the permanent appointment of Thomas Bradley, who had been serving as interim chief executive officer since March 2022, as CEO. He replaced Kevin Rehnberg, who resigned after a period of leave for health reasons.

In August, the company announced its entry into a Loss Portfolio Transfer (LPT) with Enstar Group Limited for approximately $746m, which closed on 9 November 2022.

And in September, the company announced the sale of Argo Underwriting Agency Limited and its Lloyd’s Syndicate 1200 to Westfield for  approximately $125m.

In November, Argo Group’s management mooted the potential sale of the whole company in a letter to shareholders and explained that Goldman Sachs was advising the company on potential buyers.