Tokio Marine to buy US rival Delphi Financial for $2.7 bn
21 December 2011
Japan's second-largest property-casualty insurer Tokio Marine today said it has signed a deal to buy US insurer Delphi Financial Group, for $2.7 billion, the latest in a string of overseas acquisitions by Japanese companies taking advantage of a strong yen.
Tokio Marine, which acquired US insurer Philadelphia Consolidated in 2008 for $4.7 billion, will pay Delphi Financial $43.875 for each class A share and $52.875 for every Class B share in cash.
The Tokyo-based insurer, which has spent more than $6 billion on overseas acquisitions since 2002, said the latest transaction complements its presence in the US property and casualty market and marks its entrance into the US life insurance market.
Delphi, founded in 1987, has three main subsidiaries, Reliance Standard Life Insurance Company, which underwrites a diverse portfolio of group employee benefits and also markets asset accumulation products, primarily fixed annuities, to individuals.
Its property and casualty subsidiary, Safety National Casualty Corporation, is the leader and longest-tenured insurer in the excess workers' compensation market in the US and its Matrix Absence Management, Inc. provides integrated disability and absence management services to the employee benefits market.
Tokio Marine, which had acquired Lloyd's of London insurer Kiln in 2008, has been constantly trying to expand its international insurance business as part of its long-term growth strategy, and the Delphi acquisition will boost its overseas profit contribution to 46 per cent of total earnings from 37 per cent.