Worcester insurance firm Hanover Insurance Group has completed the sale of its London specialty insurance business Chaucer for up to $940 million.
That price is about $10 million less than what the company originally announced in September when it said it reached a deal to sell Chaucer to China Reinsurance Corp.
The deal includes $779 million in cash and $41 million to be received once Chaucer’s Irish and Australian entities receive regulatory approval to be sold, which is anticipated in the first quarter. The price includes contingencies of up to $35 million and an $85 million pre-signing dividend from Chaucer.
Up to $860 million of deployable equity could be generated from the sale, Hanover said.
Hanover first bought Chaucer back in 2011 for $510 million.
Simultaneous to the sale’s closing, Hanover announced a $600-million share repurchase authorization and an accelerated share repurchase agreement for $250 million.
The company’s board of directors declared a special dividend of $4.75 per share for about $200 million in aggregate.
President and CEO John Roche said in a statement the company can now focus exclusively on the company’s domestic business.
“With a strong financial foundation, clear strategic focus, and a simplified operating structure, we are determined to be the premier property and casualty company in the independent agency channel,” he said.
In September, Hanover said the deal would include an $865 cash payment and an $85 million pre-signing dividend from Chaucer.
Hanover has been searching for a buyer for Chaucer since April when it retained Goldman Sachs & Co. to serve as the company’s adviser through the process.
