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[TOKYO] Tokio Marine Holdings Inc 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 on Wednesday. That's a 37.6 per cent 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. 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 show.
Before today, Tokio Marine had made US$8.8 billion of purchases in North America, the data show. The biggest was the 2008 purchase of Philadelphia Consolidated Holding Corp, valued at US$4.6 billion.
HCC, founded in 1974, has assets totalling US$11 billion, according to its website. The firm underwrites specialty insurance classes including aviation, construction property, US bail bonds, and kidnap and ransom, according to Fitch Ratings. The Houston, Texas-based insurer has offices in the US, UK, Spain and Ireland.