Discussion in 'Technical Analysis' started by ZZZzzzzzzz, Nov 18, 2005.
Swiss Re to buy GE insurance for $6.8 bln
All Reuters News
ZURICH (Reuters) - Swiss Re said it agreed to buy GE's Insurance Solutions business for $6.8 billion and planned to fund the deal by raising $7.5 billion in new capital, to grow and diversify its business.
The world's second-largest reinsurer said the capital hike would include up to $5.5 billion in shares and mandatory convertibles and that GE was expected to hold in excess of 10 percent of Swiss Re's shares as a result of the deal.
The company also planned to raise $2.0 billion in hybrid debt securities.
"Swiss Re expects the transaction to be accretive to earnings per share and return on equity, beginning in 2007, the first full year after closing," Chief Executive Officer John Coomber said in a statement.
Swiss Re shares had been suspended from trading earlier on Friday, pending a statement by the reinsurer.
Investors may not be impressed by the purchase, dealers said, worrying that synergies are limited and integration will be difficult.
General Electric is scaling back its reinsurance operations to improve overall returns and has ceased writing new life reinsurance business in the United States.
Swiss Re has recovered from two years of losses at the start of the decade under the leadership of John Coomber, who will hand over to more market-savvy Jacques Aigrian next year.
GE also said it would lift its share-buyback plan to $25 billion through 2008, from an earlier plan of $15 billion through 2007, and raise its quarterly dividend to 25 cents from 22 cents a share.
Story of the day. Allowing for bad math, I'd guess GE trading around 35.30 now. Swiss SMI ripping with back to back 100+ points moves. :eek: GE to mid high 35s takes us to 1275 ES easy - soon too. :eek: Insane momo. Buyers are hungry. Short is wrong!
Separate names with a comma.