Japan’s Millea Group to Buy Lloyd’s Kiln for $898 Million

The boards of Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF), the main operating companies of Japan’s Millea Group, and Bermuda-based Kiln Ltd. , a major Lloyd’s insurer, announced that they have reached agreement on the terms of a recommended cash acquisition of Kiln by TMNF to be implemented by an amalgamation under the Bermuda Companies Act.

Millea’s offer of 150 pence ($3.045) per Kiln Share values the Company at approximately £442.2 million ($898 million) in aggregate. It represents a premium of around 40.8 percent over the the closing price of 106.5 pence ($2.162) per Kiln Share on December 10, 2007, the last business day prior to Kiln announcing that it was in discussions regarding a possible offer for the Group.

“TMNF sees Kiln as playing a pivotal role in the expansion of its international underwriting operations and in enhancing its existing overseas activities,” said the bulletin. “TMNF has a high regard for the management and underwriting teams within Kiln and values highly the culture that has made Kiln the successful business that it is. It is TMNF’s intention, therefore, to retain the culture, identity and brand of Kiln.”

TMNF also stated that it has “received an irrevocable undertaking from Berkley Insurance Company in respect of 58,567,117 Kiln Shares, representing approximately 20.06 percent of Kiln’s issued share capital, to vote to approve the Acquisition at the Special General Meeting.”

TMNF President Shuzo Sumi commented: “We have enjoyed a close and long-lasting business relationship with Kiln since its formation in 1962 and believe we share the same fundamental values and business philosophy. This agreement represents an important milestone in our stated strategy to expand internationally and we believe Kiln, with its underwriting expertise, skilled employees and strong brand, represents the perfect partner. We are very excited to be working with Kiln and look forward to a long and successful collaboration.’

Edward Creasy, Group Chief Executive Officer of Kiln, indicated: “The Kiln Board believes the Acquisition represents an excellent outcome for Kiln, its shareholders, and employees. We believe Kiln’s strategy will be facilitated by becoming part of a major international group, which recognizes the strength of our brand, respects our existing culture and which will provide exciting opportunities for Kiln’s employees. We believe that TMNF, with its established national and international presence, its strong balance sheet and matching values will provide Kiln with excellent opportunities in all these respects. We look forward to an exciting future working with TMNF.”

Source: Kiln Ltd. – http://www.kilngroup.com