Tokio Marine to buy Philadelphia Cons for $4.7 bln

By David Dolan

TOKYO (Reuters) - Tokio Marine Holdings Inc (8766.T) will buy property and casualty insurer Philadelphia Consolidated Holding Corp PHLY.O for about $4.7 billion, in the largest acquisition by a Japanese financial firm in the United States.

Japan's largest property and casualty insurer said it would pay $61.5 in cash for each share of Philadelphia Consolidated, a 73 percent premium to Tuesday's closing price of $35.55.

Saddled with sluggish growth at home and unburdened by subprime investments, many cash-rich Japanese firms are once again hunting for opportunities abroad.

Japanese drug companies, food makers and financial firms have all joined in the push overseas. Outbound Japanese acquisitions for 2008 came to $24 billion as of July, nearly matching the haul for all of last year, according to Thomson Reuters data.

"This gives us access to the world's largest casualty insurance market, one that is five times the size of Japan's," Tokio Marine Tokio Marine President Shuzo Sumi told a news conference.

Sumi told Reuters earlier this month that he was looking at opportunities to acquire U.S. and European competitors to expand outside Japan, where it still generates four-fifths of its profits.

In March the Japanese firm completed the purchase of Lloyd's of London insurer Kiln Ltd for 442 million pounds ($881 million), to increase its European presence.

The new acquisition will allow Tokio Marine to expand its U.S. business beyond its current focus on Japanese firms, Sumi said.