Canadian insurer to buy OneBeacon for $1.7 billion

Canadian property/casualty insurer Intact Financial Corp. will buy OneBeacon Insurance Group Ltd. for $1.7 billion, the companies announced Tuesday.

According to a joint statement, the deal will create a specialty insurance business with more than $1.5 billion in annual premiums. The purchase price represents a 14% premium over OneBeacon’s closing stock price on May 1, the statement said. OneBeacon’s debt of $275 million will remain outstanding.

Charles Brindamour, CEO of Toronto-based Intact, said: “The addition of OneBeacon is creating a leading North American specialty lines insurer focused on small-to-midsize businesses. OneBeacon is a strong strategic fit for Intact, with deep expertise in commercial and specialty lines and shared values. We see significant growth potential from the combination of our specialty lines operations.”

Bermuda-based OneBeacon was formed in 2001 when White Mountains Insurance Group Ltd. bought British insurer Aviva P.L.C.’s U.S. property casualty business. In 2016, the insurer reported $1.1 billion in net written premium and a profit of $108.6 million.

Intact, which also offers personal lines and other commercial insurance coverage, has more than CA$8 billion ($5.86 billion) in annual premiums, the statement said.

The deal is expected to close in the fourth quarter of 2017.