Canadian conglomerate Fairfax Financial Holdings Ltd. has confirmed the sale of its Singapore-based property and casualty insurance company First Capital to Mitsui Sumitomo, a Japanese insurer.
The deal will see 97.7% of First Capital sold for a sum of US$1.6bn, over three times higher than the company’s book value.
"Mitsui Sumitomo and Fairfax share the same long-term vision and values," said Masahiro Matsumoto, Senior Executive Officer of Mitsui Sumitomo.
"We look forward to building our partnership with Fairfax to expand on our complementary global strengths and, in particular, with Mr Athappan to continue building First Capital."
The deal signifies a new global strategic partnership between the two firms that will provide Fairfax with access to Japan’s insurance markets, whilst Mitsui Sumitomo will have greater influence in the US.
"We are very excited to become partners with Mitsui Sumitomo," said Prem Watsa, Chairman and Chief Executive Officer of Fairfax.
"Mitsui Sumitomo's scale in Asia will give First Capital, under the continued leadership of Mr. Athappan, the opportunity to grow significantly.
“Mr Athappan championed this transaction, based on his strong belief that it was the best way for First Capital to continue to grow successfully while also creating a valuable long-term partnership for the Fairfax group."
The deal is expected to close around the turn of the year, subject to regulatory approval from the relevant authorities including the Monetary Authority of Singapore and the Financial Services Agency of the Government of Japan.