December 5, 2016 / 4:30 PM / 2 years ago

Liberty Mutual to buy insurer Ironshore from Fosun for $3 billion

(Reuters) - Liberty Mutual Holding Co Inc will buy Ironshore Inc, a U.S. insurer whose previous acquisition by China’s Fosun International Ltd had attracted scrutiny by a U.S. national security panel, for around $3 billion.

The deal, announced on Monday by Liberty Mutual, means that Fosun’s (0656.HK) $2.3 billion, two-step acquisition of Ironshore [IRNSHU.UL] in 2005 no longer has to clear a review by the Committee on Foreign Investment in the United States that prevented Ironshore from launching an initial public offering.

Liberty Mutual [LBRTE.UL] said in a statement that Ironshore, a specialty property and casualty insurer, would continue to operate with the same management team and brand but as part of the larger Liberty Mutual organization, a diversified insurer with operations in 29 countries.

The deal, which values Ironshore at 1.45 times its tangible book value, is expected to close in the first half of 2017 pending regulatory approvals, Liberty Mutual said.

Fosun, China’s biggest private conglomerate, had not filed for CFIUS approval when it took Ironshore private in November 2015.

One month later, it was approached by CFIUS officials concerned about how Fosun would operate Wright & Co, a provider of professional liability coverage to U.S. government employees such as law enforcement personnel and national security officials, according to people familiar with the matter.

To ensure CFIUS approval, Fosun agreed in September to sell Wright to Starr Companies, a firm run by former American International Group Inc (AIG.N) Chief Executive Hank Greenberg. It was also exploring an outright sale of Ironshore in parallel to the IPO effort.

Reporting by Greg Roumeliotis in New York; Editing by Steve Orlofsky

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