UPDATE 1-Allied World to buy Darwin Professional for $550 mln

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June 30 (Reuters) - Insurance and reinsurance company Allied World Assurance Co Holdings Ltd (AWH.N) said it will acquire Darwin Professional Underwriters Inc DR.N for $550 million in cash to expand its operations in the United States.

Darwin is a unit of Alleghany Corp (Y.N).

Allied will pay $32 per share for Darwin, a premium of about 6 percent on Friday's closing on the New York Stock Exchange.

Shares of Darwin were up 3.6 percent at $31.28 in early trade Monday on the NYSE.

"This acquisition will more than double Allied World's presence in the U.S., particularly within the U.S. health care market," said Scott Carmilani, chief executive of Allied World.

Darwin's Chief Executive Stephen Sills will retire after the transaction closes.

In a separate statement, New York-based insurer Alleghany said it expects to receive about $300 million for its 55 percent holding of Darwin's stock.

The company also expects an after-tax gain of about $94 million from the deal, which includes about $9 million of gain deferred at the time of Darwin's initial public offering in May 2006.