ACE buys Rain and Hail Insurance for $1.1B

NEW YORK -- Property and casualty insurer ACE Ltd. said Tuesday it is buying the rest of crop insurer Rain and Hail Insurance Service Inc. for $1.1 billion in cash.

ACE, which is based in Zurich, Switzerland, currently owns 20 percent of the Iowa company's outstanding stock.

Rain and Hail provides peril crop and crop-hail insurance to U.S. and Canadian farmers. It is based in Johnston, Iowa.

The deal is expected to close at the end of the year, ACE said. It requires approval by Rain and Hail shareholders and by regulators.

ACE said the acquisition will immediately add to earnings and is a "natural extension" of its relationship with the company. It expects to fund the transaction with available cash.

ACE said it will operate Rain and Hail Insurance as a separate franchise within its ACE Westchester division and Insurance-North America operations.

Shares of ACE rose 46 cents to $57.14 in midday trading.</p>