Hanover completes Chaucer sale for $940M
Photo/Grant Welker
Up to $860 million of deployable equity could be generated from Hanover's sale of Chaucer.
Worcester insurance firm Hanover Insurance Group has completed the sale of its London specialty insurance business Chaucer for up to $940 million.
That price is about $10 million less than what the company originally announced in September when it said it reached a deal to sell Chaucer to China Reinsurance Corp.
The deal includes $779 million in cash and $41 million to be received once Chaucer’s Irish and Australian entities receive regulatory approval to be sold, which is anticipated in the first quarter. The price includes contingencies of up to $35 million and an $85 million pre-signing dividend from Chaucer.
Up to $860 million of deployable equity could be generated from the sale, Hanover said.
Hanover first bought Chaucer back in 2011 for $510 million.
Simultaneous to the sale’s closing, Hanover announced a $600-million share repurchase authorization and an accelerated share repurchase agreement for $250 million.
The company’s board of directors declared a special dividend of $4.75 per share for about $200 million in aggregate.
President and CEO John Roche said in a statement the company can now focus exclusively on the company’s domestic business.
“With a strong financial foundation, clear strategic focus, and a simplified operating structure, we are determined to be the premier property and casualty company in the independent agency channel,” he said.
In September, Hanover said the deal would include an $865 cash payment and an $85 million pre-signing dividend from Chaucer.
Hanover has been searching for a buyer for Chaucer since April when it retained Goldman Sachs & Co. to serve as the company’s adviser through the process.
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