ACE to buy Mexican insurer from Ally Financial

ACE Ltd., the parent company of ACE Group, has announced its plans to acquire Mexican personal lines insurer ABA Seguros from Ally Financial Inc. for about $865 million.

Based in Monterrey, ABA Seguros is Mexico’s sixth largest property and casualty insurer and provides auto, homeowners and small business coverages. A subsidiary of Ally formed in 1956, it has more than 30 sales offices throughout the country and uses about 2000 independent agents, plus auto dealerships, banks and direct channels to sell its products.

“ACE has been operating in Mexico for many years through ACE Seguros, a business with an industrial commercial and personal accident focus,” noted that company’s chairman and CEO Evan Greenberg in a press statement. “Following our announcement last month to acquire Fianzas Monterrey, the second largest surety writer in Mexico, and now ABA, a major personal lines and agency company, we are extremely well positioned to take advantage of the many growth opportunities we believe will occur in this important country over the next decade and beyond. We expect the acquisition of ABA Seguros to be accretive to earnings in the first year and to meet or exceed our company’s long-term return on equity target by the third year.”

Ally Financial has been pursuing “strategic alternatives” for its international operations over the past year, its CEO Michael Carpenter noted in a separate release. “”ABA Seguros is a strong business, and this transaction represents a significant step in what will be a series of actions to find the best solutions for the international businesses and to maximize value for our shareholders,” he said.

“Taking these actions with respect to the international operations will enable Ally to further invest in and grow its leading U.S.-based automotive services and direct banking franchises and be best positioned to return additional capital to the U.S. taxpayer,” he added.

The acquisition, subject to regulatory approvals, is expected to close in the first half of 2013.