Texas-based HCC Insurance Holdings on Tuesday announced the closing of its acquisition by
Tokio Marine Holdings in a deal with approximately US$7.5 billion. The news prompted Fitch Ratings to downgrade HCC's rating to 'A' from 'A+'. The downgrade reflects ownership by a lower-rated parent, Fitch said, adding that
Tokio Marine's rating is constrained by the Japanese operations' exposure to country risks in Japan.
HCC’s common stock was suspended from trading on the New York Stock Exchange before market opening Wednesday, and will subsequently be delisted.
HCC is a speciality insurer with assets of US$11.1 billion and shareholders’ equity of US$3.9 billion.
Japanese buyer Tokio Marine said its consolidated business forecast for the fiscal year ending March 31, 2016 is 350 billion yen (US$290 million) in ordinary profit and 240 billion yen in net income.
Tokio Marine is known for its significant purchases. The company acquired the
Philadelphia Insurance Companies for $4.7 billion in 2008, and bought the Delphi Financial Group for $2.66 billion in 2012.
HCC had also been on the acquisition trail, completing the acquisition of Producers Ag Insurance Group for approximately $105 million in January, marking HCC's entry into the crop insurance business.
