Japanese property and casualty (P&C) insurer Mitsui Sumitomo Insurance Co., Ltd. (MSI) has agreed to acquire 15% of commercial lines P&C insurance holding company, W. R. Berkley Corporation’s outstanding common stock via open market purchases or private transactions with third parties.
MSI has entered into the agreement with a company owned by members of the Berkley family and trusts for their benefit, known collectively as the Berkley Family.
Under the agreement, MSI will not be acquiring any shares from W. R. Berkley Corporation or the Berkley Family, but from third parties in open market or private transactions.
MSI has also entered into a voting arrangement with a firm that is owned by the Berkley Family, which holds approximately 16% of W. R. Berkley’s outstanding common stock.
Under this agreement, once the Japanese insurer acquires 4.9% of the outstanding common stock, “MSI agrees to vote those shares pursuant to the recommendations of the Berkley Family, except in limited circumstances where the Berkley Family will vote the MSI shares in the same proportion as all of the non-MSI shares are voted.”
Then, once MSI acquires at least 12.5% of the outstanding stock, the Berkley Family will recommend the nomination and election of a MSI director designee to W. R. Berkley’s Board of Directors, subject to review and approval by the Board’s Nominating and Corporate Governance Committee.
The announcement confirms that the agreements between MSI and the Berkley Family will not have any effect on the day-to-day operations of W. R. Berkley, and will not reduce the Berkley Family’s commitment to the company. The intention is for the Berkley Family to continue to have two representatives on W. R. Berkley’s Board.
Further, MSI has also agreed to customary standstill restrictions relating to W. R. Berkley that are also directly enforceable by the company.
MSI’s investment in the company is subject to customary regulatory approvals and is anticipated to be completed by the end of March 2026.
Related to the investment and voting agreement, W. R. Berkley has entered into a cooperation agreement to assist MSI with its related regulatory filings, approvals, and accounting treatment for its investment.
Rob Berkley, President and CEO of W. R. Berkley Corporation, commented: “We have deep respect for MSI developed over years of collaborating with them through the Company’s re-insurance operations. We remain committed to the Company’s long-term success and we welcome the opportunity to have MSI as a shareholder. Their significant investment in the Company’s shares is a validation of our Company’s outstanding performance and growth trajectory, and we are excited to have regular conversations with them about opportunities to leverage their international presence to help the Company drive sustainable stockholder value.”
Shinichiro Funabiki, President and CEO of MSI, said: “We are extremely excited to make an investment in W. R. Berkley. Their first-class track record in the U.S. specialty market attracted us in making an investment, and we look forward to bringing our network in Japan, Asia and other selected markets to lead to sustained growth and increased value for both the Company and MSI’s investment.”
