ID :
13598
Wed, 07/23/2008 - 22:14
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https://oananews.org//node/13598
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Tokio Marine to acquire U.S. nonlife insurer for $4.7 billion
TOKYO, July 23 Kyodo - Japan's Tokio Marine Holdings Inc. said Wednesday it will acquire all outstanding shares of U.S. nonlife insurer Philadelphia Consolidated Holding Corp. for $4,705 million (about 498.7 billion yen) in a bid to begin full-scale operations in the vast U.S. insurance market.
The acquisition will be the largest of its kind ever made by the Japanese nonlife insurer, it said. The latest move follows the acquisition of British nsurer Kiln Ltd. in March.
Tokio Marine intends to establish a strong platform for the expansion of verseas insurance operations with the latest friendly takeover of the U.S. onlife insurer.
The purchase of the U.S. insurer will be conducted through Tokio Marine's holly owned subsidiary Tokio Marine & Nichido Fire Insurance Co., Tokio Marine aid.
The company wil buy the U.S. firm for $61.50 per share, a premium of 46.8 percent over the average price in 2007. The deal is expected to be completed during the October-December quarter of this year.
The Japanese firm said the acquisition of the U.S. firm is likely to boost profits in its international business by around 95 percent to $580 million (62 billion yen), based on anticipated earnings for the current fiscal year.
The earnings of Philadelphia Consolidated will be reflected in Tokio Marine's earnings from fiscal 2009 through March 2010.
''The acquisition of Philadelphia Consolidated is consistent with our aspirations for expanding globally and realizing a well-balanced business portfolio,'' said Tokio Marine President Shuzo Sumi in a statement.
Tokio Marine said the acquisition will boost the ratio of its profits from overseas insurance businesses from the current 21 percent to 35 percent.
Sumi said at a news conference in Tokyo that although the U.S. economy is slowing down due to the subprime mortgage crisis, the country's nonlife insurance market, the world's largest, should expand over the medium to long term and that increasing his firm's foothold in the market is vital for the insurer's sustainable growth.
''There are over 2,000 nonlife insurance companies there and considering that filing lawsuits is common in the United States, the hurdles to expanding business in the United States on our own were really high,'' Sumi said, adding that the firm found the best partner.
James Maguire, chief executive officer of Philadelphia Consolidated, said in a statement, ''Tokio Marine's credit quality and overall financial strength will open up additional avenues of expansion, further enabling the combined company to generate enhanced returns.''After the acquisition, Tokio Marine plans to sell the U.S. firm's products in Canada, and Central and South America, utilizing Tokio Marine's global network.
Established in 1962, Philadelphia Consolidated operates 47 branches across the United States with about 1,400 employees. In 2007, it reported $327 million in profit after tax, up from $289 million a year earlier.
The acquisition will be the largest of its kind ever made by the Japanese nonlife insurer, it said. The latest move follows the acquisition of British nsurer Kiln Ltd. in March.
Tokio Marine intends to establish a strong platform for the expansion of verseas insurance operations with the latest friendly takeover of the U.S. onlife insurer.
The purchase of the U.S. insurer will be conducted through Tokio Marine's holly owned subsidiary Tokio Marine & Nichido Fire Insurance Co., Tokio Marine aid.
The company wil buy the U.S. firm for $61.50 per share, a premium of 46.8 percent over the average price in 2007. The deal is expected to be completed during the October-December quarter of this year.
The Japanese firm said the acquisition of the U.S. firm is likely to boost profits in its international business by around 95 percent to $580 million (62 billion yen), based on anticipated earnings for the current fiscal year.
The earnings of Philadelphia Consolidated will be reflected in Tokio Marine's earnings from fiscal 2009 through March 2010.
''The acquisition of Philadelphia Consolidated is consistent with our aspirations for expanding globally and realizing a well-balanced business portfolio,'' said Tokio Marine President Shuzo Sumi in a statement.
Tokio Marine said the acquisition will boost the ratio of its profits from overseas insurance businesses from the current 21 percent to 35 percent.
Sumi said at a news conference in Tokyo that although the U.S. economy is slowing down due to the subprime mortgage crisis, the country's nonlife insurance market, the world's largest, should expand over the medium to long term and that increasing his firm's foothold in the market is vital for the insurer's sustainable growth.
''There are over 2,000 nonlife insurance companies there and considering that filing lawsuits is common in the United States, the hurdles to expanding business in the United States on our own were really high,'' Sumi said, adding that the firm found the best partner.
James Maguire, chief executive officer of Philadelphia Consolidated, said in a statement, ''Tokio Marine's credit quality and overall financial strength will open up additional avenues of expansion, further enabling the combined company to generate enhanced returns.''After the acquisition, Tokio Marine plans to sell the U.S. firm's products in Canada, and Central and South America, utilizing Tokio Marine's global network.
Established in 1962, Philadelphia Consolidated operates 47 branches across the United States with about 1,400 employees. In 2007, it reported $327 million in profit after tax, up from $289 million a year earlier.
