XL, NAC Re Talking About Deal

Bermuda-based XL Capital Ltd. and Connecticut-based NAC Re Corp. confirmed they are in discussions regarding a possible business combination. The announcement followed news wire reports that started circulating over the weekend.

The news follows closely on the heels of ACE Ltd.'s deal to acquire CIGNA Corp.'s property and casualty business. Reports put the value of the potential XL-NAC Re deal at more than US$1 billion.

Although neither party would discuss specific details of the talks or comment directly on reports in the media, Brian M. O'Hara, president and CEO of XL Capital, said, "XL Capital continuously looks for opportunities to increase shareholder value through economically accretive strategic transactions. Our discussions with NAC Re stem from our strong belief that a combination of our two companies would generate unique strategic advantages and be economically beneficial to both companies' shareholders."

The companies pointed out that nothing is final, and nothing is firm. "No assurance can be given … that such discussions, if continued, will result in any transaction being consummated. Neither XL Capital nor NAC Re expects to make any further comments or announcements unless and until an agreement is reached," they said in a prepared statement.

XL Capital Ltd., through its wholly owned subsidiaries, including XL Insurance Co., XL Mid Ocean Reinsurance Co. and The Brockbank Group PLC, provides insurance and reinsurance coverages and financial products worldwide. NAC Re Corp., through its subsidiaries, writes insurance and reinsurance throughout the world.