Chinese conglomerate Fosun International on Wednesday moved to establish an insurance foothold in the U.S., agreeing to acquire Meadowbrook Insurance Group (MIG) in a cash deal valued at $433 million.
Terms of the deal call for Fosun to pay $8.65 per share for Southfield, Mich.-based Meadowbrook, a premium of 24% to the target's Dec. 29 close and 39% above its three-month average closing price. The deal values Meadowbrook at about 1.04 times tangible book value.
Meadowbrook is a property and casualty specialist offering risk management products to agents, trade associations and small to mid-sized businesses. The deal is the result of a review of options by Meadowbrook's board.
Meadowbrook CEO Robert S. Cubbin in a statement said the deal "strengthens our capital base" and said he believes the outcome of the review benefits all parties.
Shanghai-based Fosun, a $50 billion-asset holding company with interests in the financial, mining and leisure sectors, said that the deal would give it a "significant presence" in the U.S. property and casualty market. Fosun currently has about one-third of its assets in the insurance business, including businesses in China and Portugal and a 20% interest in heavy equipment insurer Ironshore.
Fosun chairman Guo Guangchang in a statement said that the purchase is "another milestone for Fosun and will enable Fosun to further strengthen its insurance-oriented comprehensive financial capabilities."
The Chinese company has been active. Fosun is currently battling to increase its 18.4% stake in Club Mediterranee, and is rumored to be a bidder for Portugal's Novo Banco.