The Hanover Insurance Group has agreed to acquire UK-based Lloyd's insurer Chaucer Holdings, for $510m.

Under the terms of the acquisition, Chaucer shareholders will receive 53.3 pence in cash for each Chaucer Share as well as 2.7 pence in dividend, as announced by Chaucer in March 2011.

Lloyd’s insurer Chaucer, through its in-house syndicates 1084 and 1176, underwrites business in all the major insurance classes, encompassing global marine, energy, non-marine and aviation, as well as UK
motor and nuclear.

Upon completion of the transaction, Chaucer will be wholly owned subsidiary of The Hanover’s Llyod’s insurer 440 Tessera.

Chaucer with headquarters in London, has regional operations in Whitstable, England and international operations in Houston, Singapore, Buenos Aires and Copenhagen.

The Hanover president and CEO Frederick Eppinger said that Chaucer would represent a significant step forward in The Hanover’s journey to build a world-class property and casualty company.

"The combined organization would provide both companies with the benefits of greater scale, earnings diversification, and expanded market presence. Chaucer would enable us to further advance our specialty strategy, given its recognized expertise in underwriting energy, marine and aviation risks," Eppinger said.

The transaction is subject to approval and is expected to close in the July this year.