Tokio Marine to buy HCC Insurance for $7.5B

Tokio Marine Holdings said Wednesday that it agreed to buy U.S.-based HCC Insurance Holdings for $7.5 billion.

The deal is the biggest overseas deal ever made by a Japanese nonlife insurance company, the Wall Street Journal reported.

Tokio Marine is expanding its International business and says the acquisition of HCC, which is based in Houston, will "significantly enhance" its presence in the U.S., the world's largest insurance market.

In a statement, it said it will pay $78 in cash per share. The acquisition price represents a 35.8% premium to specialty insurer HCC's average share price over the past month.

The purchase will be financed through cash and borrowing.

In 2008, Tokio Marine bought U.S. Philadelphia Consolidated Holding Co. for $4.7 billion, and purchased U.S. Delphi Financial Group Inc. for $2.66 billion in 2011. It also acquired Lloyd's of London insurer Kiln Ltd in 2008.

In a statement, Tokio Marine President Tsuyoshi Nagano said: "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."

HCC's CEO Christopher J.B. Williams added: "With Tokio Marine, HCC gains an international footprint to expand our diverse portfolio and expertise globally, a financial foundation on which to compete with larger insurers and the opportunity to offer our clients expanded coverages."

The deal, which is expected to close in the fourth quarter of this year, is subject to approval by HCC's shareholders and regulators.