Herbert Smith scores Swiss Re GE acquisition instruction

Herbert Smith and its German ally has Gleiss Lutz have scooped instructions to advise Swiss Re on the $6.8bn (£3.95bn) acquisition of GE Insurance Solutions.

The City firm won the mandate following separate referrals from US firms Simpson Thacher & Bartlett and Paul Weiss Rifkind Wharton & Garrison. Simpson Thacher is advising the Swiss reinsurer on the US corporate aspects of the deal, while Paul Weiss is handling the associated financing work.

This is the first major corporate transaction Herbert Smith has handled for Swiss Re since 1996.

Under the terms of the agreement, Swiss Re will take over all property and casualty reinsurance worldwide as well as the life and health business outside the US. The American and German entities are being acquired in exchange for Swiss Re shares. Following completion of the deal, GE is expected to hold more than 10 per cent of Swiss Re’s capital. Meanwhile, Swiss Re is buying the UK entities for cash under Part VII of the Financial Services and Markets Act 2000, a structure that is being used increasingly on deals involving insurance companies.

In connection with the acquisition, Swiss Re plans to raise $7.5bn (£4.38bn) in new capital by issuing a combination of ordinary shares and hybrid debt securities.

The Herbert Smith team is being led by corporate partner Geoffrey Maddock. Gary Horowitz and Mark Bergman are heading the Simpson Thacher and Paul Weiss teams respectively. The Gleiss team was led by corporate partner Gerhard Wegen.

Weil Gotshal & Manges is advising GE on the US M&A aspects of the deal. Clifford Chance and Slaughter and May are acting for GE in the UK.