Australian firm buys British insurer for €847m

Insurance Australia Group said today it had bought British motor underwriter and broker Equity Insurance Group for £570m (€846.9m).

The Australian company said it would fund the purchase with an equity placement of £249m (€369.9m).

“Equity is an ideal fit with our acquisition criteria in stable, yet profitable, markets like the UK. It’s a motor-led insurance business with consistently high margins in its markets and a strong management team,” IAG chief executive Michael Hawker said.

He said the purchase was expected to add 10% to earnings per share in the 2008 financial year.

The acquisition, which is subject to regulatory approval, is expected to be completed in the first quarter of 2007.

Equity’s management team will continue to be led by chief executive Neil Utley, who would join IAG’s executive team, Hawker said.