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

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 more than $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. OneBeacon shares rose 16 percent Wednesday to $18.24.

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, OneBeacon Chief Executive Mike Miller said, "Both companies are dedicated to ensuring a seamless transition and look forward to profitably growing our specialty portfolio."

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 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 is expected to pay regular quarterly dividends until then.

Evan Ramstad • 612-673-4241