Tokio Marine Holdings of Japan said Wednesday that it has agreed to buy U.S. specialty insurer HCC Insurance Holdings Inc (HHC) for $7.5 billion, making the acquisition the largest by a Japanese company so far this year and the largest ever by a Japanese insurer.
Tokyo, Japan-based Tokio Marine Holdings Inc. will acquire all outstanding shares of HCC for $78 per share, which is a 37.6 percent premium on HCC’s June 9 closing price, according to a statement from the companies.
Tokio Marine to pay $78 in cash per share Thanks to an aging population sapping demand for policies, Japanese insurers are looking for ways to spread risks and enhance revenues overseas.
Driven by a need to diversify geographical exposure to natural disasters, Tokio Marine President Tsuyoshi Nagano told Reuters earlier this month that his firm was still scouring markets around the world for acquisition.
“HCC is a top tier specialty insurer with market leading underwriting capabilities. Leveraging Tokio Marine’s financial strength and global footprint, HCC will further expand the revenues, profits and capabilities of Tokio Marine,” Tokio Marine President Tsuyoshi Nagano said in the statement.
Tokio Marine said the acquisition of HCC HCC, -0.35% would increase the percentage of profits it earned overseas to 46% of the total from 38%.
Before Tokio Marine’s announcement, Japan’s outbound M&As stood at $38.5 billion so far this year, up 15 percent on the same period last year.
The company had net written premiums of 2.87 trillion yen, or about $23 billion, and posted profit of ¥184.1 billion in the 2013 fiscal year.