Tokio Marine Holdings Inc said on June 10 it had agreed to buy US specialty insurer HCC Insurance Holdings Inc for $7.5 billion, in what would be the biggest M&A deal this year by a Japanese company. Tokio Marine, Japan's biggest insurer by market value, expects to complete the acquisition between October and December, it said in a statement.
With insurers among the most acquisitive Japanese companies, Tokio Marine alone has spent more than $8 billion on international deals since 2008, including US insurer Philadelphia Consolidated for $4.7 billion in 2008 and US business Delphi for about $2.7 billion in 2012. HCC would be its biggest-ever deal.
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. He added, however, that rising prices had made it more cautious in the Asia-Pacific region. Before the Tokio announcement, Japan's outbound M&A was at $38.5 billion so far this year, already up 15 percent on the same period last year.
Prime Minister Shinzo Abe's easy-money stimulus policies have spurred record profits for Japanese companies, but sluggish business demand at home has prompted them to look abroad for growth, especially to the United States, even though the weaker yen makes such acquisitions more expensive.
Tokio Marine will not issue new shares to fund the acquisition of HCC, Nagano told a news conference in Tokyo.
Comments
Comments are closed.