Allied World Assurance (AWH) to Merge with Darwin Professional (DR)
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Allied World Assurance Company Holdings, Ltd (NYSE: AWH) and Darwin Professional Underwriters, Inc. (NYSE: DR) today announced a definitive merger agreement whereby Allied World would acquire Darwin. Darwin offers a wide array of specialty and primary professional lines coverages, which includes an industry leading health care professional liability franchise and a strong niche errors and omissions division. Darwin has also developed a business and technology model to underwrite small professional liability business, which is expected to complement Allied World's large account, specialty insurance and reinsurance strategy.
Under the terms of the merger agreement, security holders of Darwin will receive approximately $550 million in cash, or $32.00 per share, in exchange for 100% of their interests in Darwin Professional Underwriters, Inc. The $32.00 per share purchase price is subject to a downward adjustment in the event that certain representations by Darwin in the merger agreement with respect to its capitalization are breached and, as a result of such breach, the aggregate consideration payable by Allied World in the merger is increased by more than $1,000,000.
The boards of directors of both companies have approved the transaction, which is subject to customary closing conditions, including obtaining various regulatory approvals and the approval of Darwin's shareholders. A subsidiary of Alleghany Corporation has agreed to vote 40% of the outstanding Darwin shares in favor of the transaction. The transaction is expected to be completed during the fourth quarter of 2008 and is anticipated to be accretive to Allied World's earnings in the first full year after the closing. Pending the completion of this transaction, both companies will continue to conduct business as usual.[SM]
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