Zurich Insurance Raises $5 Billion for Beazley Acquisition

Zurich Insurance has successfully raised 3.9 billion Swiss francs (approximately $5 billion) through a share sale, aimed at funding its acquisition of specialty insurer Beazley. This strategic move, announced on Tuesday, led to a significant drop in the company's stock value, reflecting the immediate market reaction.

The Swiss insurance carrier issued 7.1 million new shares at a nominal value of 0.10 francs each, priced at 550 francs per share. This action will increase Zurich's share capital from 14.6 million francs to 15.3 million francs. The raised funds will primarily support the Beazley acquisition, with additional financing covered by existing cash reserves and newly arranged debt facilities.

Following the announcement, Zurich Insurance's share price declined by 5.4% to 543 francs in morning trading. This represents the largest daily drop since April, placing Zurich at the lower end of Switzerland’s blue-chip index. The newly issued shares are expected to begin trading on the SIX Swiss Exchange around March 5.

The acquisition marks Zurich's strategic expansion in the specialty insurance sector, underscored by Beazley shareholders accepting an £8.1 billion proposal. Under the agreed terms, Beazley shareholders will receive 1,335 pence per share, comprising 1,310 pence in cash and a 25 pence dividend.