The Work

September 15, 2010 4:56 PM

Mayer Brown Advises ACE on $1.1 Billion Insurance Buy

Posted by Brian Baxter

Mayer Brown was one of six firms advising various clients on a $1.1 billion cross-border insurance deal announced on Tuesday.

Zurich-based property and casualty insurer ACE Limited has agreed to pay $1.1 billion in cash for the remaining 80 percent stake it doesn't own in Johnston, Iowa-based crop insurer Rain and Hail Insurance Service.

Edward Best, cochair of the capital markets and financial institutions practice groups at Mayer Brown, led a team from the firm advising ACE on the deal. Best says the firm has a longtime primary outside corporate counsel relationship with ACE and that he's represented the company since taking it public in 1993.

"We moved them from the Cayman Islands to Switzerland a few years ago, which was just backbreaking, schlepping all those boxes," Best jokes. "But seriously, ACE was formed in 1986, we started representing them in 1987, and I've done almost all of their capital markets and M&A transactions."

ACE initially acquired a 20 percent interest in Rain and Hail in 1999 after the insurer completed its purchase of health insurer CIGNA's worldwide property and casualty unit. Best says that deal, which Mayer Brown advised on, helped transform ACE into an insurer with a global platform, such as AIG.

"At the time, [ACE] and AIG were the only two property and casualty insurers that were essentially on every continent and every major location," says Best, adding that ACE has been flush with cash recently and was looking for a way to deploy it. "You can either give it back to your shareholders or you can do acquisitions, and this is a great acquisition for them."

Best was assisted on the Rain and Hail deal by Mayer Brown M&A partner Lawrence Hamilton, employee benefits partner Wayne Luepker, tax partner James Barry, corporate counsel Vikram Sidhu and Paul Chandler, ERISA counsel Karen Grotberg, and antitrust counsel Jay Brown.

ACE deputy general counsel Christopher Kearns, senior counsel Kathryn Schneider, and counsel Tabber Benedict led an in-house team on the Rain and Hail deal. Best says that Kearns is the head corporate lawyer for the company, and notes that ACE general counsel Robert Cusumano was also involved in the transaction.

Since Rain and Hail has operations in Canada, Best says Mayer Brown enlisted a small firm in Regina, Saskatchewan--MacPherson Leslie & Tyerman--to advise on Canadian legal issues. Corporate partner Nathan Schissel and associate Ryan Klassen led the team from the firm.

Serving as lead counsel to Rain and Hail were corporate partners Frank Carroll and Beverly Evans from Des Moines firm Davis, Brown, Koehn, Shors & Roberts. Mark Welker, chair of the tax and benefits group at Husch Blackwell Sanders in Kansas City, Mo., served as employee benefits counsel to the company.

Trent Reinert, a partner in the business, tax, and estate planning practice at Omaha's Baird Holm, advised Rain and Hail on its employee stock ownership program. Rain and Hail's general counsel is Michael Davenport.

Mayer Brown's Best says that Duane Tolander, a Des Moines accountant with his own consulting firm, served as ESOP trustee to ensure that ERISA standards in the deal were fair. Best says that Tolander had his own counsel in Robert Schatz, a partner specializing in ESOP matters with Boylan, Brown, Code, Vigdor & Wilson in Hartford.

ACE's acquisition of Rain and Hail is expected to close before the end of the year.


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