Swiss-based insurance giant Zurich Insurance has agreed to acquire Australian travel insurance company Cover-More Group for nearly AUD741m ($554m).

Through a Scheme Implementation Agreement (SIA), Zurich will acquire all of the ordinary shares of the travel insurer, with each priced at A$1.95 ($1.46).

The acquisition is expected to consolidate Zurich's position as a global travel insurance provider.

Zurich Asia Pacific CEO Jack Howell said: “The proposed acquisition is an excellent fit with Zurich’s strategy for its retail business and should create significant value for the Group. It will further strengthen our position and expertise in the global travel insurance market and support our ambition to expand our distribution partnerships.

“Through Cover-More’s technology platform, Zurich will be able to attract and serve the needs of retail customers in the growing travel insurance market.”

Following the acquisition, Cover-More will retain its brand and operate as an independent entity.

Cover-More’s board has unanimously recommended the company shareholders to vote in favour of the acquisition deal by Zurich.

Its stakeholders will decide on the fate of the deal in a meeting to be held in the coming late March or early April.

Cover-More CEO and managing director Mike Emmett, said: “If the Scheme is implemented, Cover-More will be well positioned to accelerate growth in the global travel insurance market with access to Zurich’s global platform and strong balance sheet. This is an acknowledgement of our expanding global footprint, specialist travel insurance capability and market-leading partnerships in key markets.”

The deal is also subject to other necessary approvals including FIRB approval, approval under the Financial Services and Markets Act (2000) (UK) and approval under the Hart-Scott-Rodino Antitrust Improvements Act 1976.

According to the terms agreed, Zurich will have the right to match any competing offers besides will get a 1% break fee if the deal with Cover-More Group doesn’t go through.

Image: Zurich Asia Pacific CEO Jack Howell. Photo: courtesy of Zurich.