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Deals

Japan's Sompo to buy U.S. crop insurer from CGB Enterprises

TOKYO (Reuters) - Japanese insurer Sompo Holdings Inc will buy Diversified Crop Insurance Services, the U.S. crop insurance unit of U.S. grain shipper CGB Enterprises Inc, Sompo said.

The acquisition will make Sompo one of the largest crop insurance providers in the world, with combined gross written premiums of over $2 billion, the Japanese firm’s international unit said in a statement on Friday.

Sompo is expected to pay 40 billion to 50 billion yen ($380-$470 million) for the No. 4 U.S. crop insurance provider, Japan’s Nikkei business daily said on Saturday. The company’s statement did not include terms of the deal, and Sompo in Japan could not immediately be reached for comment.

Sompo already owns ARMtech, the sixth-biggest underwriter of U.S. crop insurance.

ARMtech and Diversified will begin planning their integration immediately, with the transaction expected to close in the fourth quarter, Sompo said.

The acquisition comes as Sompo steps up expansions in its insurance business for the agriculture sector at a time when demand for such coverage is rising due to a growing number of severe weather events, including drought and floods amid global warming, the Nikkei said.

($1 = 106.2300 yen)

Reporting by Yuka Obayashi; Editing by William Mallard

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