Canadian insurer Intact to buy U.S.-based OneBeacon for $1.7 billion

Tue May 2, 2017 5:30pm EDT
 
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(Reuters) - Intact Financial Corp (IFC.TO: Quote), Canada's largest property and casualty insurer, said it would buy U.S.-based specialty insurer OneBeacon Insurance Group Ltd OB.N for $1.7 billion, creating a specialty insurer focused on small- and mid-sized businesses.

The $18.10 cash offer represented a 15.3 percent premium to OneBeacon's Tuesday close.

Shares of OneBeacon, controlled by White Mountains Insurance Group Ltd, were trading at the offer price in after-hours trading.

The deal will create an insurer with over C$2 billion ($1.46 billion) of annual premiums, the company said.

Intact said it plans to finance the deal and related expenses using a combination of C$700 million of equity financing, about C$700 million of excess capital and about C$1 billion of financing consisting of loans, notes and preferred shares.

OneBeacon's debt of about $275 million will remain outstanding, Intact said.

Goldman Sachs is the financial adviser for Intact, while Credit Suisse advised OneBeacon.

($1 = 1.3709 Canadian dollars)

(Reporting by Arunima Banerjee in Bengaluru; Editing by Maju Samuel and Sriraj Kalluvila)