The Carlyle Group and T&D Holdings have agreed to acquire AIG’s 76.6% stake in Fortitude Re for about $1.8 billion.
Following closure, Carlyle will own 71.5% stake in the target, while T&D and AIG will hold 25% and 3.5%, respectively. The private equity firm’s ownership includes the nearly 20% it acquired in November last year.
As part of the agreement, AIG will receive a $500 million non-pro-rata distribution. If Carlyle and T&D fail to pay the amount by May next year, they will have to make an additional payment based on their stake.
Moreover, Carlyle will continue its asset management relationships with the target, while T&D will support its growth with industry experience.
“[Fortitude Re] is strongly positioned as an industry leader in managing run-off insurance liabilities. [Carlyle] looks forward to partnering with the management team to help Fortitude Re grow,” said Carlyle’s co-CEO Kewsong Lee.
Willkie Farr & Gallagher consulted AIG on the legal matters. Oliver Wyman served as financial adviser to Carlyle. Additionally, Debevoise & Plimpton provided legal advice to Carlyle.
Citi advised T&D on the financial side of the deal and Nishimura & Asahi, King & Spalding and Appleby acted as its legal advisers. Sidley Austin advised Fortitude Re on the legal matters.