(Bloomberg) -- MS&AD Insurance Group Holdings Inc.agreed to buy Lloyd’s of London insurer Amlin Plc for about 3.47billion pounds ($5.3 billion) in its biggest acquisition, joiningan overseas deal spree by Japanese peers. Amlin shares surged.

The Tokyo-based company’s MitsuiSumitomo Insurance Co. unit will pay 670 pence a share incash for the London-based insurer, MS&AD saidTuesday. The deal represents a 36 percent premium on Monday’sclosing price and is 2.4 times the firm’s net tangible book value,the highest multiple paid for any Lloyd’s insurer, Amlin ChiefExecutive Officer Charles Philipps said on a conference call withreporters.

The takeover adds to a flurry of deals among Amlin’s peers inthe Lloyd’s and Bermuda insurance markets, while extending about of overseas expansion by insurers from Asia, where growth hasslowed. Japan’s Sumitomo Life Insurance Co. and MeijiYasuda Life Insurance Co. agreed to buy U.S. firms in thepast two months.

"Bleak demand outlook and fierce competition at home, and morepressure to spend their ample cash holdings for future growth, isspurring Japanese insurers to accelerate outbound acquisitions,”Koichi Niwa, a Tokyo-based analyst at SMBC Nikko Securities Inc.said in a telephone interview.

Amlin soared by a record 33 percent to 652 pence at 10:23 a.m.in London trading, boosting its market value to 3.3 billion pounds.As of yesterday, Amlin had been the worst-performing Lloyd’sstock.MS&AD’s stock fell 2.6 percent at the close of trading inTokyo before the announcement, paring its 2015 gain to 24percent.

Excluding Amlin, there have been about $81 billionof insurance deals globally in 2015, more than double theamount for the same period a year ago. Amlin joins Lloyd’s insurersCatlin Group Ltd. and Brit Plc in being acquired by an overseascompetitor, as an influx of reinsurance capital pushes prices lowerand spreads into other lines of business, placing pressure onprofitability.

“The price is fair,” Yasuyoshi Karasawa, CEOof MS&AD told reporters in Tokyo. “It is veryimportant for us to be in the top three companies in the Lloyd’smarket.”

Until now, MS&AD had been focusing its expansionon Asia. A deal with Amlin helps to strengthen its existing Lloyd’soperations and diversifies its business into Europe and NorthAmerica.

Philipps, who expects to remain CEO of Amlin after thecompletion of the deal, said two weeks ago that the insurer was notup for sale after reporting lower first-half profit and furtherdeclines in reinsurance prices. Amlin directors will recommendshareholders approve the deal, according to the statement.

“The offer reflects strategic value that MSI places on Amlin andheightened mergers and acquisitions activity in the sector overrecent months,” Philipps said. “We did not put the company up forsale, but if someone comes along and offers a better proposition,”we have to consider it, he added.

--With assistance from Shigeru Sato in Tokyo.

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