Ageas has signed up to buy Groupama Insurance Company Limited (GICL) for £116m.
The deal follows the announcement of exclusive discussions on 7 September.
It will see Ageas become the fifth largest UK non-life insurer with a 5.2% market share, the fourth largest private motor insurer with a 11.7% market share and the fourth largest personal lines insurer with a 7.1% market share.
The transaction excludes Groupama's UK broking operations.
Based on 2011 non-life income of Ageas UK and Groupama the gross written premiums of Ageas UK as a result of the acquisition would increase by around 20% on a pro forma basis, amounting to over £2.1bn.
The deal is subject to regulatory approvals and closing is expected before the end of 2012. On completion of the transaction, Groupama will become a wholly owned subsidiary of Ageas UK.
Broker commitment
Barry Smith, chief executive of Ageas UK, commented: "This deal is a great strategic fit in the continuing development of Ageas in the UK. Both Ageas and GICL have strong reputations in the UK broker market and this deal reinforces our on-going commitment to brokers and their customers.
"We pride ourselves on strong relationships with brokers and today's announcement sends a clear signal that we will continue to support and work closely with them. The complementary strengths of Ageas and GICL will create an exciting business focused on customer needs whilst generating a greater return for our company."
Bart De Smet, CEO of Ageas, said: "I welcome this acquisition on its strategic and financial merits and as an important next step in the execution of the Ageas Group strategy towards a well balanced portfolio in terms of life and non-life business.
"Following on from the start of the partnership with Tesco Bank in 2010, and more recently the acquisition of Kwik Fit Financial Services and Castle Cover, this acquisition also reflects the multi-channel, multi-brand distribution strategy of Ageas as a group and more specifically in the UK."
He concluded: "In terms of financial merits, the return on investment is expected to exceed Ageas's minimum return requirement of 11%."
