Acquisitions · Specialty insurance
Tokio Marine buys US specialty insurer HCC for about $7.5 billion
- Buyer
- Tokio Marine Holdings (Tokyo)
- Target
- HCC Insurance Holdings, Houston, Texas
- Value
- About $7.5B ($78 per share)
- Status
- Completed on October 27, 2015.
- Date
- 2015-06-10
Tokio Marine Holdings agreed to buy HCC Insurance Holdings, a Houston-based specialty insurer, for $78 per share in cash, or about $7.5 billion. HCC underwrites more than 100 classes of specialty insurance in the US and internationally. It was the largest Japan-US deal of 2015.
Why it matters
The deal added specialty lines that are less exposed to natural catastrophes and the property and casualty pricing cycle, which diversifies Tokio Marine's earnings. It also continued a wave of large US insurance purchases by Japanese insurers facing slow growth at home.
About HCC
HCC was founded in 1974 and had about 2,500 employees, with offices in the US, the UK, Spain and Ireland. It worked in three segments: North America property and casualty, covering lines such as directors and officers, agriculture, aviation and surety; accident and health, mainly medical stop-loss; and international, including Lloyd's business in London.
Terms and closing
The $78 price was a 37.6% premium to HCC's closing price on June 9, 2015. Tokio Marine paid with cash on hand and borrowings, and the deal had no financing condition. Tokio Marine called it its most significant acquisition since Delphi Financial Group in 2012. HCC shareholders approved the merger on September 18, 2015, and HCC's shares were delisted from the New York Stock Exchange after the October 27 closing.
Sources
Kakehashi M&A News home
