Sompo to buy Endurance

Insurer Sompo Holdings Inc said recently that it will buy US property and casualty insurer Endurance Specialty Holdings Ltd for USD6.3 billion, the latest in a string of acquisitions by insurers starved for growth in aging Japan.

Japan’s insurance companies have been aggressively buying US businesses, announcing a slew of multibillion-dollar deals as they seek to expand beyond a rapidly maturing home market.
Sompo said it has agreed to buy 67.7 million shares in Endurance Specialty at USD93 each, a premium of 40.3 percent against the stock’s average price since July.

Chief executive Kengo Sakurada said at a news conference the premium was not high given the premiums paid by other Japanese insurers in overseas deals. He also said Endurance’s management, including chief executive John Charman, would remain in place.

“We want the current management to stay, so we are paying for a control premium,” he said.

The deal is the second-largest ever by a Japanese insurer, after Tokio Marine Holdings Inc’s USD7.5 billion purchase of US insurer HCC Insurance Holdings Inc last year. Tokio Marine paid a premium of 35.8 percent.