Sompo Holdings, an insurance group based in Japan, has announced that it will buy US-based Endurance Specialty Holdings for US$6.3 billion.
Sompo’s move is the latest in a series of overseas acquisitions by Japanese insurers to stave off the stagnant growth in their home market.
Sompo is Japan’s third-largest property and casualty insurer with a market value of US$12 billion. It is planning to buy 67.7 million shares in Endurance at US$93 each, resulting in a 40.3% premium against the stock’s average price since July.
However, Sompo CEO Kengo Sakurada said in a news conference that the premium was not particularly high, compared to the premiums paid by other Japanese firms in foreign deals. He added that Endurance’s leadership, including CEO John Charman, will be retained.
“We want the current management to stay, so we are paying for a control premium,” Sakurada said.
The transaction is the second-largest ever entered by a Japanese insurer, following
Tokio Marine’s US$7.5 billion acquisition of HCC Insurance Holdings last year.
Tokio Marine paid a premium of 35.8%.
Endurance has a market value of US$6 billion and focuses on specialty lines of property and casualty insurance. Last year, it had US$3.3 billion in gross written premiums, and a net income of US$355 million.
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