According to a report from Reuters Cerberus, a U.S. private investment firm, is considering buying German insurer Gerling. No definitive decision has been reached, but talks are said to be in an advanced stage.
One source told Reuters that the negotiations were now at the level of “due diligence.” This indicates that they are serious and well advanced, as Gerling would be required to fully open its books and related financial data to inspection by Cerberus.
Neither company has as yet commented on the report, and no figures have been given.
Gerling, which now operates mainly in Germany, has shrunk to a shadow of its former self. It was ranked as the seventh largest non-life reinsurer in the world in 2001, based on net premiums written of $3.462 billion, but asbestos claims, the weak equity markets and Sept. 11 combined to severely impact the company’s finances.
At the end of October 2002 Gerling-Konzern Globale Ruckversicherungs—AG (GKG), its reinsurance operation, announced that it had given up on the survival of its P/C reinsurance operations and on merger efforts to save them. GKG put more than $4.5 billion worth of P/C reinsurance business into run-off, and restructured its reinsurance operations to concentrate on its life business. At the time it also indicated that it was still looking for a new partner. It may finally have found one.
Reuters also reported that potential buyers include Talanx and Zurich Financial Services.
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