Swiss Re to fund portion of GE Insurance Solutions acquisition with $500 million of convertibles

By Angela McDaniels

Seattle, April 21 - Swiss Reinsurance Co. plans to issue $500 million of mandatorily convertible securities to General Electric Co. in connection with its acquisition of GE Insurance Solutions, according to a company news release.

As a result of the convertibles issuance, GE will own a less than 10% share of Swiss Re.

Swiss Re said it will use $800 million of cash, $3.9 billion from the sale of equity securities and $2.4 billion of Swiss Re shares to fund the remainder of the $7.6 billion purchase price.

The company sold $800 million of 6% convertibles in December to fund the purchase and plans to sell $2 billion of hybrid debt securities before the end of the second quarter.

The acquisition is expected to close in mid 2006.

In addition, the company said that head of financial services John Fitzpatrick plans to leave Swiss Re to start an investment fund, in which Swiss Re plans to become a "significant" investor. Jacques Aigrain will assume interim responsibility for financial services until a successor is named.

Zurich, Switzerland-based Swiss Re is a reinsurance and financial services group.

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