2.26 trillion won deal secures 80.56% stake

Canopius valued at PBR 1.8x, PER 9.5x

Overseas share of insurance profit to reach mid-20% range

10% of equity deployed; shareholder returns unchanged

President Lee Moon-hwa calls deal 'turning point' for global expansion

[Provided by Samsung Fire]
[Provided by Samsung Fire]

Samsung Fire & Marine Insurance is targeting the first half of next year to complete its acquisition of a controlling stake in Lloyd's of London insurer Canopius, seven years after making its first investment in the company in 2019.

According to a regulatory filing with the Financial Supervisory Service on Tuesday, Samsung Fire decided to acquire 405.31 million shares of Fortuna Topco Limited, the holding company that owns 100 percent of Canopius. The purchase price is 2.26 trillion won ($1.67 billion), equivalent to 10.64 percent of Samsung Fire's equity. The board approved the transaction on Monday.

The deal will raise Samsung Fire's stake in Canopius from 40.03 percent to 80.56 percent. The expected acquisition date is March 31 next year, subject to regulatory approval.

The transaction is structured as a co-investment. Funds managed by global investment firm KKR and the Korea Investment Corporation are participating alongside Samsung Fire and will hold stakes of 12.15 percent and 7.29 percent, respectively, upon closing. The seller is Fidentia Fortuna Holdings, a vehicle led by US private equity fund Centerbridge Partners.

Samsung Fire disclosed in the filing that the acquisition will be funded in cash, though it did not specify how the funds would be raised. The company dismissed speculation that it plans to issue 3 trillion won in hybrid capital securities. "The issuance of hybrid capital securities is not true at all," a Samsung Fire official said. "There is no change to our capital policy direction, including our existing shareholder return plan."

Seven-year partnership bears fruit; overseas insurance profit share to reach mid-20% range

Samsung Fire first invested in Canopius in 2019, then made two additional investments in 2020 and last year to build its stake to 40 percent.

With this acquisition, Samsung Fire aims to establish itself as a global specialty insurer spanning Lloyd's, the United States and Asia. Its overseas business — currently around 10 percent of insurance profit — is expected to climb to the mid-20 percent range once Canopius is consolidated as a subsidiary.

Based on the disclosed transaction price, Canopius is valued at approximately 5.59 trillion won (about $4.11 billion). Using Fortuna Topco's year-end equity of 3.04 trillion won and net profit for the period of 587.4 billion won, the implied price-to-book ratio is about 1.8 times and the price-to-earnings ratio is about 9.5 times.

Canopius has posted sharp earnings growth. Its gross written premiums rose 27 percent from 4.8 trillion won in 2024 to 6.09 trillion won last year, while net profit climbed 19 percent from 493.4 billion won to 587.4 billion won over the same period. For last year, pre-tax profit stood at $553 million and return on equity was 21 percent.

Samsung Fire President Lee Moon-hwa said the acquisition "marks an important turning point for Samsung Fire to leap forward as a global insurer beyond the domestic market." Lee added that the company "will actively support both sides in growing together in the global insurance market while respecting Canopius's expertise and management autonomy."

Canopius Group CEO Neil Robertson said the deal gives Canopius "a long-term oriented shareholder and a stable permanent capital base."

Regulatory approval remains; consolidation effect draws attention

The remaining step is securing approval from regulators at home and abroad. The actual closing date may vary depending on when approvals are granted and whether other conditions are met, according to the filing.

A key focus is the effect of consolidating Canopius onto Samsung Fire's books. Canopius has until now been accounted for under the equity method, but once the acquisition closes it will become a subsidiary, with its results reflected in Samsung Fire's consolidated financial statements. Analysts will be watching for changes in the K-ICS solvency ratio that may result from incorporating a foreign insurer, as well as remeasurement gains or losses on Samsung Fire's existing stake. Samsung Fire is scheduled to hold a conference call on Thursday to discuss its third-quarter earnings.


won@heraldcorp.com