Sydney, Jan. 5 (Reuters): Australia’s QBE Insurance Group Ltd said on Friday it would buy Winterthur US Holdings from France’s AXA for $1.2 billion, making its biggest ever acquisition to boost its US presence. Investors cheered QBE’s second major US buy in two months, lifting its shares 7 per cent to a record A$30.40. By 0357 GMT, QBE shares had given up some gains but were still up 5.1 per cent at A$29.84 in a lower overall market.

“If you combine this with the Praetorian acquisition that they did in December, their footprint in the US is now quite large. These are two very sizeable acquisitions,” said Credit Suisse analyst Arjan van Veen.

Wisconsin-based Winterthur US writes property and casualty insurance risks through 1,700 independent agents in 33 states of the United States. Gross premium income for 2007 is expected to be around $1.45 billion and QBE forecasts the deal to add a net profit after tax of about $160 million in the first full year.

AXA, which bought Swiss insurer Winterthur in June last year, said in a statement that Winterthur US would repay $636 million of inter-company loans to the Winterthur group.

QBE would raise about A$800 million ($630 million) in a share placement to fund part of the purchase.

It will also use existing excess capital and short-term debt to fund the purchase, and its acquisition of Praetorian Financial.

QBE last month announced purchase of Praetorian for $800 million from German reinsurer Hannover Re.

Australian insurers are looking to spread overseas as they battle stagnant growth in the home market. Last year, Insurance Australia Group Ltd made two purchases in the UK.

Global rating agency Standard & Poor’s kept its ratings on QBE unchanged after the latest acquisition.