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Converium sells US operations

The Swiss reinsurer Converium has agreed to sell its US operations to Berkshire Hathaway for $295mn, paving the way for a possible upgrade of the company.

Converium - which confirmed earlier this year that it was looking to sell its run-off units - said it would sell its operations to Berkshire Hathaway's National Indemnity for a total consideration of $95mn cash and $200mn debt.

Upon the closing of the sale - which is subject to regulatory approval - National Indemnity will assume all of Converium North America's $1.06bn reinsurance liabilities.

Converium estimates the sale will result in a decrease in shareholders' equity of $135mn.

Inga Beale, Converium's chief executive, said: "With this transaction we have successfully delivered on our promise to achieve finality regarding Converium's US operations through a clean-cut sale. We can now fully concentrate on building Converium's future, with our business strategy focused on markets outside the US."

In July, Standard & Poor's placed the reinsurer on a "positive outlook" - a precursor to a possible upgrade from the current BBB+ - and indicated that the resolution of its US liabilities would be a key factor, together with the "successful conclusion of regulatory investigations".

Shares in Converium - which have performed strongly this year - were up 0.6 percent in morning trading at SFr 16.05.

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