New York — Tokio Marine Holdings Inc. is paying $4.39 billion in cash to acquire Bala Cynwyd, Pa.-based commercial P&C insurer Philadelphia Consolidated Holding Corp.

Scheduled to close in the fourth quarter of 2008, the total transaction is valued at approximately $4.7 billion and is considered the biggest acquisition of a U.S. company by a Japanese financial firm. Acquiring Philadelphia will give Tokyo-based Tokio access to the company’s specialty line customers, who include rental car agencies and non-profit agencies.

“The acquisition of Philadelphia Consolidated is consistent with our aspirations of expanding globally and realizing a well-balanced business portfolio,” says Shuzo Sumi, president of Tokio Marine. “With its disciplined, highly focused marketing and underwriting operations, Philadelphia Consolidated is an excellent strategic fit for us. When opportunities to acquire a premier organization arise, the best response is to act. "

James Maguire, Jr., CEO of Philadelphia Consolidated, says the deal will provide numerous benefits to the company’s customers, brokers, agents and employees. “Philadelphia Consolidated's strong distribution relationships with brokers and agents and our local market knowledge acquired over almost 50 years will provide Tokio Marine with a substantial platform in its effort to realize superior growth and profitability in the U.S. and on an international scale,” he says. “In addition, Tokio Marine's credit quality and overall financial strength will open up additional avenues of expansion—further enabling the combined company to generate enhanced returns.”

The deal marks the second multi-billion dollar acquisition of an American property/casualty insurer this year. In April, Boston-based Liberty Mutual Group spent $6.2 billion to acquire Seattle-based Safeco Corp. 

Sources: Philadelphia Consolidated Holding Corp., INN archives

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