Houston Casualty’s parent agrees to be bought by Tokio Marine for US$7.5 billion

Tokio Marine Holdings Inc. has agreed to acquire Houston-based HCC Insurance Holdings Inc. for about US$7.5 billion.

The companies announced Wednesday their boards have approved the agreement, which is still subject to shareholder and regulator approval, as well as “other customary closing conditions.”

If approved, Tokyo-based Tokio Marine would acquire HCC through Tokio Marine & Nichido Fire Insurance Co. Ltd. which has a presence in 40 countries. In Canada, Tokio Marine & Nichido Fire Insurance has a presence in Toronto and Vancouver. Canada’s Office of the Superintendent of Financial Institutions (OSFI) reports that Tokio Marine & Nichido Fire Insurance had $32.2 million in net premiums written in Canada in 2014.

Worldwide, Tokio Marine Holdings reported net premiums written of 3.1 trillion yen for the year ending March 31, 2015. The Canadian dollar was trading Thursday at 100.4 yen.

HCC’s companies include Houston Casualty Company and eight other insurers operating in the United States. Outside the U.S., HCC’s holdings include Lloyd’s Syndicate 4141. HCC recorded net earned premiums of US$2.3 billion in 2014.

HCC’s international coverages include marine and energy, property treaty, property (direct and facultative), accident and health, directors’ and officers’ liability, professional indemnity, casualty, surety and credit. In North America, HCC offers various lines of liability, agriculture, aviation, sports and entertainment, public risk and surety.

“With Tokio Marine, HCC gains an international footprint to expand our diverse portfolio and expertise globally, a financial foundation on which to compete with larger insurers and the opportunity to offer our clients expanded coverages,” HCC chief executive officer Christopher J.B. Williams stated in a release.

If the acquisition is approved, Tokio Marine would acquire all outstanding shares of HCC, for US$78 in cash per share, which is “a 37.6% premium to the share price as of close of business on June 9, 2015,” the firms stated.

In addition to its Houston head office, HCC has offices in Mt. Kisko, N.Y., Wakefield, Mass., Auburn Hills, Mich., Dallas, Atlanta, Los Angeles and London. HCC says a “large portion” of its international business is written in London.