Mitsui Sumitomo Insurance plans to acquire a stake in W.R. Berkley Corporation, marking a significant expansion in the global insurance market.
W.R. Berkley Corporation has officially announced that Mitsui Sumitomo Insurance (MSI) has entered into an agreement to acquire up to 15% of W.R. Berkley’s outstanding common stock. This acquisition will be achieved by purchasing shares either in the open market or through private transactions with independent third parties.
It is important to note that the Berkley family, which maintains a substantial stake in the corporation, will not be selling any shares directly to MSI. Furthermore, MSI will not conduct direct purchases from W.R. Berkley Corporation itself.
According to the terms of the agreement, once MSI has acquired a minimum of 4.9% of the outstanding shares, it will align its voting with recommendations from the Berkley family, except in specific circumstances where its voting will reflect the broader shareholder base. Should MSI’s stake exceed 12.5%, the Berkley family will endorse the nomination of an MSI representative to the board, subject to approval from the board’s nominating and corporate governance committee. The Berkley family will continue to hold two board seats.
This strategic arrangement will not affect the operational activities of W.R. Berkley Corporation, with the Berkley family remaining fully committed to the company. MSI has also accepted standard restrictions on its stake, enforceable directly by W.R. Berkley.
Rob Berkley, President and CEO of W.R. Berkley, commented on the partnership, stating, “We have developed a deep respect for MSI through years of collaboration via our reinsurance operations. Their significant investment is a testament to our company’s performance and growth trajectory. We look forward to leveraging their international presence to create enduring value for our stockholders.”
MSI’s President and CEO, Shinichiro Funabiki, expressed that the investment fits well with their strategic objectives. “Their exemplary track record in the U.S. specialty market attracted us to make this investment. We eagerly anticipate utilizing our network across Japan, Asia, and other selected markets to drive sustained growth and enhanced value for both W.R. Berkley and MSI,” said Funabiki.
A special committee of independent directors was formed by W.R. Berkley’s board to meticulously review the agreement. This committee, in consultation with independent legal advisors, negotiated and ultimately endorsed the deal, which was subsequently approved by the board’s independent directors. The Berkley family had previously stated that they would not proceed without the committee’s recommendation.
The transaction is subject to regulatory approvals and is anticipated to be concluded by March 2026.
In January, W.R. Berkley reported a remarkable fourth-quarter net income of $576.1 million, marking a 45% increase compared to the previous year. Additionally, net premiums increased to $2.94 billion from $2.72 billion the previous year, supported by an average rate increase of 7.7% across all lines.
As of March 28, shares of W.R. Berkley traded at $71.35, marking a 7.65% rise from the previous closing price.
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