Tokio Marine Holdings Inc has agreed to buy HCC Insurance Holdings Inc for about US$7.5 billion in the biggest acquisition by a Japanese insurer, stepping up an overseas expansion.
Tokio Marine will pay US$78 in cash per share for HCC, according to a statement yesterday. That is a 37.6 percent premium to the latest closing price, according to the release.
Japanese insurers have announced US$27.5 billion of acquisitions in the past five years as they chased growth outside their stagnant home market, where a shrinking population is eroding demand.
Photo: AFP / JIJI PRESS
The HCC acquisition topped Dai-Ichi Life Insurance Co’s US$5.5 billion deal for Protective Life Corp, announced last year, Bloomberg-compiled data showed.
The premium Tokyo Marine offered almost exactly matches what Japanese insurers have paid on average over the past five years, data compiled by Bloomberg showed. Globally, premiums in insurance takeovers averaged 23.7 percent in that period.
Dai-Ichi plans to build on its acquisition of Protective to further expand overseas, president Koichiro Watanabe said in an interview this month. It plans to give more authority to regional units overseas to accelerate decisionmaking and set aside dollar-denominated capital for mergers and aquisitions, he said.
HCC, founded in 1974, has assets totaling US$11 billion, according to its Web site. The firm underwrites specialty insurance classes including aviation, construction property, US bail bonds and kidnap and ransom, according to Fitch Ratings. The Houston-based insurer has offices in the US, UK, Spain and Ireland.
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