SYDNEY (XFN-ASIA) - Insurance Australia Group Ltd has requested that its shares be placed in a trading halt as it has signed an agreement to acquire UK motor underwriter and insurer Equity Insurance Group and will be undertaking an institutional placement.
No further details were given.
The Australian Financial Review reported IAG plans to pay 600 mln stg for Equity Insurance Group, citing unnamed sources.
The newspaper said the deal to buy Equity Insurance from two private equity firms will also involve a 500 mln aud plus capital raising.
Australia's leading general insurer has been expanding overseas as it sees few growth opportunities in the mature Australian market.
In September, IAG acquired the UK's fifth largest motor insurance group, Hastings Insurance Services Ltd and personal and motor insurer Advantage Insurance Co Ltd, at a combined cost of 350 mln aud.
It is also negotiating to buy a 25 pct stake in China's second-biggest general insurer, China Pacific Property Insurance.
(1 usd = 1.27 aud)
bruce.hextall@xfn.com
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