Hanover sells specialty business Chaucer for $950M
Photo | Grant Welker
The Hanover Insurance Group's Worcester campus.
Worcester-based Hanover Insurance Group has agreed to sell its specialty insurance business Chaucer to a Chinese company for $950 million.
The transaction includes a cash payment of $865 million from China Reinsurance Corp. and an $85 million pre-signing dividend from London-based Chaucer received in the second quarter of this year, Hanover said Thursday.
Of the cash payment, $820 million will be payable at closing -- expected later this year or early 2019 -- and $45 million held in escrow which may be lowered if catastrophe losses in 2018 reach a certain mark.
"Our decision to sell Chaucer followed an extensive strategic review and careful consideration," said Hanover President and CEO John Roche. "This transaction will enable us to build on the growing momentum in our domestic property and casualty businesses, as we continue to advance our long-term strategy and deliver even stronger shareholder returns."
Hanover had been considering a sale of Chaucer for several months. In March, the company said it retained New York City financial services firm Goldman Sachs & Co. to serve as an adviser through the process.
The transaction is subject to approvals from several regulatory agencies, including the Prudential Regulation Authority, Lloyd’s of London, China Reinsurance Corp.’s shareholders and other governmental entities in China.
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