Tables turn: Two historic Bermudian rivals to merge

Two Bermudian rivals, previously embroiled in a takeover fight, have agreed to merge, creating a local insurance and pension provider that could dominate the local market. The combined company will serve not only Bermuda but also the Caribbean, Gibraltar, and Malta, with improved digital offerings.

Bermuda domestic insurers Argus Group and BF&M have announced plans to merge. The all-stock transaction - which will see BF&M shareholders own 60% of the new entity and Argus investors hold the balance – brings to an end an acrimonious year which started when Argus announced plans to buy out the single largest shareholder in its rival.

Under the agreement, which is expected to close by the end of the year, Argus will amalgamate with BF&M subsidiary Eleos Health with Argus shareholders receiving 0.251 BF&M common shares for each Argus share that they hold. The combined company will be renamed in due course.

A joint statement said the agreement, which was unanimously approved by both boards, said: “The boards of directors of both companies believe the transaction represents a compelling opportunity to create a stronger, more efficient and more diversified group.

“The proposed amalgamation brings together two Bermudian insurers with complementary expertise, product lines and geographic footprints. The increased scale of the combined group will support ongoing investment in best-in-class products and services, accelerate growth plans, and bring greater buying power in the context of ongoing inflationary headwinds.”

Following closing, Abigail Clifford, CEO of BF&M, will be chief executive officer of the combined group and Peter Dunkerley, CFO and Deputy CEO of Argus, will become chief financial officer of the combined group. The remaining executive leadership team for the combined group following the closing will comprise of highly experienced leaders from both companies, the statement said.

The statement said the transaction structure would ensure uninterrupted policy coverage and service for both BF&M and Argus customers.

It added that the expected financial benefits of the deal include higher quality earnings profile driven by enhanced portfolio diversification, efficiency opportunities across combined operations and underwriting and strong capitalisation and financial strength ratings which provide flexibility to support future strategic initiatives, sustainable growth, and an attractive dividend to shareholders.

The merger would give the combined company greater scale in healthcare to help mitigate rapidly rising costs in Bermuda whilst continuing to deliver high quality care to the island communities the companies serve.

The combined company would offer services in Bermuda, the Caribbean, Gibraltar and Malta and would also have improved digital offerings.

Clifford said: said: “We are thrilled to announce an agreement to form a new insurance company with tremendous talent, superior products, additional resources, unmatched dedication to customer service, and the ability to deliver stronger returns to shareholders. This proposed combination would meaningfully accelerate our progress across BF&M’s three strategic pillars – growth, efficiency, and service – and better position both organisations to navigate the rapidly evolving insurance landscape as one unified enterprise.

“Together, we are committed to maintaining our proud heritage as Bermudian businesses and developing innovative solutions to improve the quality of life for our island while ensuring our insureds and patients have choice and access to care.

“I would like to express my deepest appreciation to the entire BF&M team for their extraordinary efforts to reach this milestone. We look forward to the prospect of working with new colleagues from Argus to achieve our collective ambitious vision, exceed the expectations of our customers and partners, and create enhanced value for all stakeholders.”

Argus’ chief executive officer Alison Hill, said: “Our strategy has always been to grow our business so that we can better leverage scale and buying power for the benefit of our customers and community.

“I am incredibly proud of the progress that we have made over the last 15 years to transform Argus. We have diversified our business lines, grown our markets and delivered impressive shareholder value. I am therefore delighted that this transformation is culminating in the formation of a Bermudian insurance champion to serve the people of Bermuda and our other international communities.

“I would like to take the opportunity to thank my incredible colleagues for all playing their part in driving to make this combination a reality and ensuring that the enlarged group is well placed to continue to thrive in the future.”

Following completion of the amalgamation, BF&M’s board of directors will consist of 10 directors: six current BF&M directors (Clifford, Anthony Joaquin, Conor O’Dea, Gordon Henderson, Andrew Lo and Paul Markey) and four current Argus directors (David Brown, Barclay Simmons, Costas Miranthis and Kim Wilkerson). Joaquin, who currently serves as chairman of BF&M, will serve as Chairman of the combined group.

Anthony Joaquin, Chairman of BF&M, commented: “This combination is the result of significant efforts by both companies to enhance scale, diversification, resilience, and returns for shareholders.

“We have a world-class leadership team drawing from both companies, and the BF&M board of directors is confident this new company will be uniquely capable of successfully navigating a highly dynamic operating environment and leading the future growth of the Bermuda insurance market.”

David Brown, chairman of Argus, added: “This is the right time to bring together two historic Bermudian businesses to improve the breadth of products and services offered to the island of Bermuda and the international communities we serve. The Argus board of directors strongly believes this transaction is the right step to deliver enhanced value creation for all stakeholders.”

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