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Accelerating its international expansion, Japanese insurer Tokio Marine Holdings Inc. agreed Wednesday to buy U.S. property and casualty insurer Philadelphia Consolidated Holding Corp. for about $4.7 billion in cash.
The deal, which complements Tokio Marine's purchase of Kiln Ltd. of London in March, calls for the Tokyo-based buyer to pay $61.50 for each Philadelphia Consolidated share, representing a 73% premium to the closing price of $35.55 on Tuesday.
With the domestic market in Japan shrinking, Tokio Marine has been looking to expand in other developed markets. Its £442.2 million ($884 million) purchase of Kiln, which is incorporated in Bermuda but based in London, gave it the fourth-largest agency operating on the Lloyds of London market. "The acquisition of Philadelphia Consolidated is consistent with our aspirations of expanding globally and realizing a well-balanced business portfolio,'' said Tokio Marine president Shuzo Sumi in the statement announcing the deal. "Combined with the recently completed acquisition of Kiln, we have established a strong presence in both key U.S. P&C and London insurance markets.'' The parties expect to close the deal in the fourth quarter of 2008, and the buyer's Tokio Marine & Nichido Fire Insurance Co. Ltd. unit will incorporate Philadelphia Consolidated's earnings into its own in the fiscal year beginning in April 2009. - Peter Moreira For the full story check out: TheDeal.com's: Tokio Marine in U.S. expansion Categories Deal Video
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