AIG and Onex's $7 Billion Deal Reshapes Insurance Landscape

A recent transaction involving AIG, Onex Corporation, and Convex has created a pivotal change in the ownership of the specialty insurer. Onex now controls a 63% stake in Convex, becoming the majority shareholder through a $7 billion deal. Meanwhile, AIG retains a minority interest of approximately 35% in Convex and has also secured a 9.9% share in Onex, highlighting significant moves in regulatory compliance requirements and strategic investments.

The transaction entails AIG investing $2.1 billion for its share in Convex and $642 million in Onex, underlining a strategic alliance. AIG plans a $2 billion investment into Onex's private equity and credit ventures over the next three years, indicating a robust partnership focus. This strategic move aims to strengthen AIG's position within the insurance industry, potentially improving its financial metrics such as earnings and return on equity.

Peter Zaffino, AIG's Chairman and CEO, is optimistic about these minority stakes, seeing them as integral to future growth. Onex CEO Bobby Le Blanc emphasized the acquisition of Convex as crucial for the company's value creation and earnings expansion, praising the exceptional risk management and operational capabilities of Convex's team. Convex Chairman Stephen Catlin and CEO Paul Brand also highlighted the importance of regulatory cooperation and the transaction's role in future business development and underwriting enhancements.

This strategic arrangement among AIG, Onex, and Convex showcases the insurance industry's evolving landscape, underscoring collaboration for growth and value maximization. It reflects the increasing integrations among payers, providers, and carriers seeking to enhance claims processing, partnership benefits, and client service across the board.