NEW YORK (TheStreet) --Shares of HCC Insurance Holdings Inc. (HCC) are gaining by 36.01% to $77.13 in pre-market trading on Wednesday morning. The U.S. specialty insurer announced it is being acquired by insurance holding company Tokio Marine Holdings (TKOMY) in a transaction valued at $7.5 billion.
The deal between the two companies creates the opportunity to combine HCC's specialty expertise with Tokio Marine's global resources, the companies said in a statement announcing the deal.
The merger will enhance Japan-based Tokio Marine's operations in the U.S. and solidify its standing "as a truly global insurer," the statement continued.
Tokio Marine will pay $78 per share for HCC, a 35.8% premium to the company's average share price over the past month.
The deal is expected to close in the 2015 fourth quarter.
"This transaction yields significant value for HCC's shareholders. With Tokio Marine, HCC gains an international footprint to expand our diverse portfolio and expertise globally, a financial foundation on which to compete with larger insurers and the opportunity to offer our clients expanded coverages," HCC CEO Christopher Williams said.
Separately, TheStreet Ratings team rates HCC INSURANCE HOLDINGS INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HCC INSURANCE HOLDINGS INC (HCC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, notable return on equity and increase in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow."