Canadian insurance firm buys Plymouth-based OneBeacon for $1.7 billion

May 03--OneBeacon Insurance Group, one of Minnesota's largest financial firms, agreed to be sold to Intact Financial Corp., a Canadian insurance company, for $1.7 billion.

The combination forms a specialty insurance company with over $1.5 billion in annual premiums. It represents a major expansion into the U.S. market by the Canadian firm.

Intact agreed to pay $18.10 per share for OneBeacon, which was about a 15 percent premium over OneBeacon's recent market value. In the opening minutes of trading this morning, OneBeacon shares were up 17 percent to $18.29.

Separately, the Plymouth-based company said it earned $32.1 million, or 34 cents a share, in the first quarter of the year. That's down from $46.4 million a year ago. Adjusted for one-time gains, the company's latest profit amounted to 24 cents a share.

Revenue was $292.4 million, up from $278.6 million a year ago.

In a statement announcing the acquisition by Intact, OneBeacon chief executive Mike Miller said, "Both companies are dedicated to ensuring a seamless transition and look forward to profitably growing our specialty portfolio going forward."

The chief of Intact, Charles Brindamour, said OneBeacon was a "strong strategic fit" because of its expertise in commercial and specialty lines of insurance. "We see significant growth potential from the combination of our specialty lines operations and we look forward to welcoming OneBeacon employees to the Intact family," he said in a statement.

OneBeacon, based in Plymouth, was formed in 2001 when White Mountains Insurance Group acquired the former CGU's U.S. property-casualty business from Aviva PLC. White Mountains sold about 28 percent of OneBeacon's common shares in an initial public offering and still retains a stake that represents nearly 97 percent of voting power. White Mountains, which is based in Hanover, N.H., agreed to vote for the deal.

The deal is expected to close in the fourth quarter. OneBeacon said it expected to continue paying regular quarterly dividends until then.

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