American International Group, Inc. (NYSE:AIG) saw its shares ease in premarket trade after it announced that it was buying Validus Holdings Ltd. (NYSE:VR) in an all cash deal for US$5.56bn.
In a statement, AIG said the purchase of the insurer gives it a "leading reinsurance underwriter, a highly regarded operation at Lloyd's, an enhanced offering in the U.S. domestic market, and an insurance-linked securities asset manager."
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AIG believes the acquisition will be immediately accretive to its per-share earnings and return on equity.
The acquisition has been approved by the boards of both firms and is likely to close in mid-2018.
In late 2017, AIG was released from the U.S. government's "systemically important financial institution" designation, which freed up more capital for operations, rather than regulatory costs.
Validus shareholders will be paid US$68 per share, a premium to the US$46.25 it traded on Monday.
In premarket, AIG was down 1.12% at US$61.5.