The deal will give Sompo expanded reach in specialty insurance and reinsurance markets, while adding over $4.6 billion in annual premiums.
Analysts updated their view on Aspen Insurance after the Bermuda-based insurer accepted a $3.5 billion cash buyout from Japan’s Sompo Holdings.
Citi downgraded the stock to ‘Neutral’ from ‘Buy’ and slashed its price target to $37.50 from $43 as it does not see another buyer topping the offer. Citizens JMP also lowered its rating to ‘Market Perform’ from ‘Outperform,’ noting that while a higher offer “can never be ruled out,” the odds are low.
In contrast, Wells Fargo raised its target price to $37.50 from $35 while keeping an ‘Equal Weight’ rating, saying the agreed value reflects Sompo’s cash offer. The firm added that with Apollo as Aspen’s majority owner, the deal is expected to close in the first half of 2026.
Sompo said on Wednesday it will buy all outstanding Class A shares of Aspen for $37.50 per share, marking a 35.6% premium to the insurer’s Aug. 19 closing price of $27.66.
Aspen’s common stock will be delisted from the NYSE once the deal is completed, though its preference shares will remain outstanding.
The deal aims to diversify Sompo’s portfolio in high-growth international markets and strengthen its specialty insurance and reinsurance lines, including cyber, credit, and political risk, as well as property catastrophe reinsurance.
Sompo also highlighted Aspen’s Lloyd’s syndicate as a key asset, offering licensing access across the Americas, Europe, the U.K. and the Asia-Pacific region.
Aspen brings more than $4.6 billion in annual gross written premiums and reported a combined ratio of 87.9% in 2024 with an operating return on equity of 19.4%. It also provides fee-based income through Aspen Capital Markets, which manages over $2 billion in assets and generated most of its 2024 fees from long-tail, non-catastrophe business.
Sompo CEO James Shea called Aspen an opportunity to build a “robust and diversified” platform, while Aspen CEO Mark Cloutier said the deal offered an “excellent outcome” for shareholders through the 35.6% premium.
Advisors on the deal include Morgan Stanley for Sompo and Goldman Sachs for Aspen.
On Stocktwits, retail sentiment for Aspen was ‘bearish’ amid ‘high’ message volume.
Aspen’s stock has risen 12.5% so far in 2025.
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