Willkie represented global insurance organization American International Group, Inc. in its agreement to sell a 76.6 percent ownership interest in Fortitude Group Holdings to The Carlyle Group and T&D Holdings.
On November 25, Willkie client American International Group, Inc. (NYSE: AIG) and The Carlyle Group (NASDAQ: CG) and T&D Holdings (TYO: 8795) announced that a newly created Carlyle-managed fund, together with T&D, have partnered to acquire from AIG a 76.6 percent ownership interest in Fortitude Group Holdings, whose principal operating subsidiary is Fortitude Re, for approximately $1.8 billion. After closing, ownership interests in Fortitude Re will include Carlyle and its fund investors at 71.5 percent (including the 19.9 percent stake previously acquired by Carlyle in November 2018), T&D at 25 percent and AIG at 3.5 percent.
AIG will receive a $500 million non-pro-rata distribution, which if not paid by the later of May 13, 2020 or transaction close will result in an additional payment from the new Carlyle-managed fund and T&D based on their Fortitude Re ownership interest.
This transaction, which is expected to close in mid-2020, furthers AIG’s and Carlyle’s efforts to stand up Fortitude Re as an independent company and position it as a premier provider of retroactive reinsurance and legacy run-off management solutions for long-dated, complex risks to the global insurance industry. The transaction will enhance Carlyle’s ability to support Fortitude Re’s growth plans, provide Fortitude Re access to Carlyle’s wide array of investment strategies and position it for long-term success. T&D brings additional industry and international expertise to develop Fortitude Re’s strategically differentiated capabilities. With the backing of Carlyle, T&D and AIG, Fortitude Re will pursue global opportunities to successfully acquire and manage legacy insurance portfolios.
AIG is a leading global insurance organization with over 100 years of experience providing a wide range of property casualty insurance, life insurance, retirement solutions, and other financial services to customers in more than 80 countries and jurisdictions.
With $222 billion of assets under management (as of 9/30/2019), The Carlyle Group is a global investment firm that deploys private capital across four business segments: Corporate Private Equity, Real Assets, Global Credit and Investment Solutions. Based in Tokyo, T&D Holdings, Inc. is a publicly listed insurance holdings company of T&D Insurance Group, which is comprised of three core life insurers, Taiyo Life Insurance Company, Daido Life Insurance Company and T&D Financial Life Insurance Company.
The Willkie deal team was led by partner Robert Rachofsky and included partners Laura Delanoy and Elizabeth Bannigan.