Amlin backs £3.5 billion deal with Japan's Mitsui Sumitomo Insurance and joins exodus abroad

Amlin, one of the capital’s biggest insurers, has become the latest in a string of Lloyd’s of London firms to fall into foreign hands as it was snapped up by a Japanese rival for £3.5 billion.

Mitsui Sumitomo Insurance (MSI), the eighth-largest non-life insurer in the world, has offered 670p a share for Amlin, 36% higher than last night’s closing share price.

The FTSE-250 listed group follows in the footsteps of Canopius, Catlin and Brit Insurance, each acquired by overseas players in the past two years.

“We didn’t feel the pressure to do a merger,” said chief executive Charlie Philipps, who will remain at the helm of Amlin.

“In life, when there is an opportunity to go from something good to something even better, it’s silly not to consider it.”

Top shareholders — including Majedie Asset Management and Invesco Asset Management, which together hold just over 15% of the company — have agreed to accept the bid.

“At this price, we expect the deal to proceed and do not expect a counterbid,” said Shore Capital’s insurance analyst Eamonn Flanagan.

Just a handful of UK-listed independent insurers now remain at Lloyd’s, including Beazley, Hiscox and Novae, and today’s takeover could prompt expectations of a further feeding frenzy for the remaining names.

The wider insurance sector is also undergoing significant consolidation with Aviva completing its £5.6 billion takeover of Friend’s Life in April and Swiss insurer Zurich eyeing RSA.

Amlin, which sponsors the Formula E racing car championship, has long been flagged as a takeover target by analysts but Philipps said a sale had not been touted around the City.

“We would never hoist a ‘for sale’ sign over the company because all that does is create uncertainty for the staff,” he added.

The chunky price offered by MSI – a subsidiary of larger parent company MS&AD Insurance Group – is twice as large as Amlin’s book value, making it a pricier purchase than the value of rivals Hiscox and Lancashire.

Amlin has around 1,900 staff and 16 offices around the world, including its new headquarters at the Cheesegrater building on Leadenhall Street.