UPDATE 1-Australia's QBE to buy ZC Sterling for $575 mln
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SYDNEY, Nov 26 (Reuters) - QBE Insurance Group Ltd (QBE.AX), Australia's top insurer by premium income, will buy U.S.-based underwriting agency ZC Sterling Corp for $575 million, part funded by a $1.3 billion equity raising, and has upped its 2008 revenue growth target.
QBE would also buy three more underwriting agencies for a total cost of $120 million. The new purchases would help QBE to achieve gross written premium of A$16.5 billion in 2009.
The company said in a statement on Wednesday it plans to raise A$2 billion ($1.3 billion) through a share placement to help fund the acquisitions.
QBE, which earns about two-thirds of revenues from offshore, said the fall in Australian dollar against the U.S. dollar was having a positive impact on QBE's revenue. As a result, QBE raised its 2008 revenue growth forecast by 6.4 percent to A$13.3 billion.
QBE, which has completed more than 115 acquisitions in the past 25 years, said it plans to buy back up to A$1.25 billion in face value of its tier 1 perpetual securities issued in 2006 and 2007 in exchange for five-year senior notes.
The capital raising and exchange of notes is expected to strengthen QBE's capital base, the company said. ($1=A$1.53) (Reporting by Denny Thomas; Editing by James Thornhill)
