Australia's QBE to Acquire Winterthur US for 1.16 Billion Dollars

Posted 05 January 2007 @ 09:22 am EET     Print     Reprint     E-Mail     Comments

SYDNEY (AP) - Australia's QBE Insurance Group has said it will acquire US property and casualty insurer Winterthur US Holdings Inc from France's AXA SA for 1.16 billion dollars.

AXA SA said Winterthur would repay 636 million dollars in inter-company loans as part of the sales agreement. The Paris-based insurance group said the loan repayments were in addition to the purchase price.

It said the sale of Winterthur US followed a strategic review of the US operations after last year's 7.9 billion euro (10.3 billion US dollar) purchase of the Winterthur group from Credit Suisse.

QBE, the second largest underwriter on the Lloyds of London market, said the acquisition of Winterthur US, which trades under the names General Casualty and Unigard, completed an expansion strategy in the Americas.

The acquisition is subject to regulatory approval. QBE chief executive Frank O'Halloran said Winterthur was expected to contribute a net profit of 160 million dollars in the first full year before the cost of funding and synergies.

QBE expects gross written premium in 2007 from Winterthur to be around 1.45 billion dollars. "Winterthur US gives us a strong footprint in western, mid-west and northeast US states for small to medium property and casualty business through a large base of independent agents," O'Halloran said.

QBE's Winterthur US acquisition comes just three weeks after its 800 million dollar purchase of US-based property and casualty insurance company Praetorian Financial Group. QBE said it will fund both acquisitions through a combination of existing excess capital, dividend reinvestment and an 800 million dollar share placement.