Munich Re to buy US insurer HSB Group
German reinsurance group Munich Re on Monday said it has agreed to buy the specialty insurer HSB Group from troubled US giant AIG for $742 million (€531 million).
It planned to fund the acquisition "entirely from existing resources," Munich Re said in a statement.
HSB's core activity is the insurance and inspection of engineering risks in the United States, and in 2007 the company posted an after-tax profit of $158 million, it added. The all-cash deal is subject to regulatory approval, "which is expected to be completed at the end of the first quarter of 2009," Munich Re said.
Munich Re has already acquired a number of profitable US insurance groups, among them The Midland Company in October 2007 for $1.3 billion and health-care insurer Sterling Life Insurance for $352 million in December 2007.
On Monday, Munich Re shares gained 0.33 percent to €106.72 in early Frankfurt trading, while the DAX index of leading shares was off by 1.0 percent overall.
"It shows there aren't only losers in the financial crisis," Dow Jones Newswires quoted a trader as saying.
American International Group (AIG), the world's largest insurer before the global credit crisis, was on the brink of collapse when the US government offered an $85-billion lifeline and took a stake in the firm in mid-September, at the time the biggest corporate bailout in history.
The government rescue, which has since ballooned to $152 billion, requires that AIG sell off assets in exchange for the loan.
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It planned to fund the acquisition "entirely from existing resources," Munich Re said in a statement.
HSB's core activity is the insurance and inspection of engineering risks in the United States, and in 2007 the company posted an after-tax profit of $158 million, it added. The all-cash deal is subject to regulatory approval, "which is expected to be completed at the end of the first quarter of 2009," Munich Re said.
Munich Re has already acquired a number of profitable US insurance groups, among them The Midland Company in October 2007 for $1.3 billion and health-care insurer Sterling Life Insurance for $352 million in December 2007.
On Monday, Munich Re shares gained 0.33 percent to €106.72 in early Frankfurt trading, while the DAX index of leading shares was off by 1.0 percent overall.
"It shows there aren't only losers in the financial crisis," Dow Jones Newswires quoted a trader as saying.
American International Group (AIG), the world's largest insurer before the global credit crisis, was on the brink of collapse when the US government offered an $85-billion lifeline and took a stake in the firm in mid-September, at the time the biggest corporate bailout in history.
The government rescue, which has since ballooned to $152 billion, requires that AIG sell off assets in exchange for the loan.
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