Tokio Marine Holdings, Inc. (“TMHD”), and HCC Insurance Holdings, Inc., have entered into a definitive agreement under which TMHD will acquire all outstanding shares of HCC, a U.S. insurance holding company comprising property and casualty, accident and health, and other specialty insurance businesses, for $78 in cash per share through TMHD's wholly owned subsidiary, Tokio Marine & Nichido Fire Insurance Co., Ltd. (“TMNF”).

The total transaction value is approximately $7.5 billion, and the transaction is expected to close in the fourth quarter of 2015.

HCC, founded in 1974, underwrites specialty insurance products through three key segments:

- North America property and casualty: a diverse portfolio of specialty businesses, including D&O, agriculture, primary casualty, aviation, surety, sports and entertainment, disability/contingency, and public risk;

- Accident and health: medical stop-loss and other medical products that are short-tail and not correlated with the traditional property and casualty insurance market cycle; and

- International: underwrites London market lines as well as global specialty businesses, including D&O, professional indemnity, surety, and credit through Lloyd's and company platforms.

Tsuyoshi Nagano, the president of Tokio Marine, said, “In line with the strategy to expand our international business, the acquisition enables Tokio Marine to build a more diversified and highly profitable global portfolio with low volatility, taking into account the nature of HCC's businesses which are largely non-correlated, have limited catastrophe exposure, and are less dependent on property and casualty market cycles. HCC is a top tier specialty insurer with market leading underwriting capabilities. Leveraging Tokio Marine's financial strength and global footprint, HCC will further expand the revenues, profits, and capabilities of Tokio Marine.”

Christopher J.B. Williams, the chief executive officer of HCC, said, “This transaction yields significant value for HCC's shareholders. With Tokio Marine, HCC gains an international footprint to expand our diverse portfolio and expertise globally, a financial foundation on which to compete with larger insurers and the opportunity to offer our clients expanded coverages. Tokio Marine's values and underwriting culture are aligned with HCC's. We believe the combination is an excellent extension of Tokio Marine's stated long-term business strategy, and we are excited to be a part of that strategy.”

Credit Suisse and Evercore acted as financial advisors to Tokio Marine in this transaction and Sullivan & Cromwell LLP provided external legal counsel. Goldman Sachs acted as financial advisor to HCC and Willkie Farr & Gallagher LLP provided external legal counsel.

Victoria Spears

Victoria Spears

Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].

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