The acquisition is part of its U.S. strategy to achieve sustainable and profitable growth in the world's biggest reinsurance market. Munich Re is financing the acquisition through its own funds, Munich Re views the purchase of Cincinnati-based Midland, a leader in offering P/C insurance in niche insurance markets, such as the manufactured housing and motor homes sectors, as a cross-selling opportunity.
According to Midland, the deal will help it expand globally "in ways that may not have been possible without the capital, resources and reputation of an organization like Munich Re."
Midland had net profit of $71 million on premium income of $832 million in 2006, yielding a return on equity of 13.3%, Munich Re said.
Munich Re shares were indicated unchanged before the market opening in Frankfurt. Under the terms of the deal, Munich Re will assume all outstanding debt obligations for Midland.