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Liberty Mutual to buy Ironshore for $3 billion

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Liberty Mutual to buy Ironshore for $3 billion

Liberty Mutual Insurance Co. said Monday it will buy Ironshore Inc. from Chinese conglomerate Fosun International Ltd. for about $3 billion. 

Hamilton, Bermuda-based Ironshore is a specialty and surplus lines insurer with gross premiums written of $2.2 billion in 2015. The company has 800 employees located in 15 countries.  

Ironshore is the sixth largest U.S.-based surplus lines insurer with $1.01 billion in nonadmitted premiums, according to Business Insurance’s latest ranking. Liberty Mutual's existing surplus lines operation, Liberty Insurance Surplus Corp., reported $342.2 million in nonadmitted premiums in 2015. 

Ironshore was established in 2006 and is headed by Kevin H. Kelley, who previously was a long-time senior executive at Lexington Insurance Co., the main surplus lines unit of American International Group Inc.  

Fosun bought 20% of Ironshore in February 2015 and bought the remaining 80% in November of the same year. The purchase prompted a regulatory probe by the Committee on Foreign Investment in the United States, which monitors purchases of U.S. businesses by foreign organizations to determine whether they could affect national security. 

Fosun International announced in June that it would spin off Ironshore, which it acquired for $2.3 billion in 2013. Ironshore raised $100 million in an initial public offering in July. 

Liberty Mutual will acquire a 100% ownership interest in Ironshore, and the transaction is expected to close in the first half of 2017, Liberty Mutual said in a statement Monday. Mr. Kelley and the Ironshore management team will join Liberty Mutual, according to the statement. 

Ironshore will operate with the same brand, but as part of the larger Liberty Mutual organization, which is working to grow its specialty lines operations, according to the statement.  

“Ironshore has a track record of profitably underwriting global and diverse specialty risks insurance and is an ideal complement to Liberty Mutual, providing additional scale, expertise, innovation and market relationships to our $5 billion Global Specialty business,” said David H. Long, Liberty Mutual chairman and CEO, in the statement. 

Rating agency Standard & Poor's Corp. said in a statement that "Ironshore could elevate Liberty Mutual's presence in the U.S. excess-and-surplus-lines market, and the acquisition is consistent with the group's long-term strategy to increase its specialty bandwidth."