Eastern Insurance provides employee benefits consulting to clients. Credit: StartupStockPhotos from Pixabay.

US-based Arthur J Gallagher & Co has agreed to acquire Eastern Insurance Group, a subsidiary of Eastern Bank, for a cash consideration of $510m.

Eastern Insurance offers comprehensive commercial property and casualty (P&C) and personal lines products. It also provides employee benefits consulting to clients throughout the Northeast US.

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Arthur said that Eastern Insurance CEO Timothy J Lodge and his team will remain in their current location under the leadership of Gallagher North-East region retail P&C brokerage operations head Patrick Kennedy, and Gallagher East region employee benefits consulting and brokerage operations head John Neumaier.

Subject to regulatory approval, the deal is slated to be completed in Q4 2023.

Arthur J Gallagher chairman, president and CEO J Patrick Gallagher Jr said: “Eastern Insurance is highly regarded throughout New England, where they have established a strong culture and demonstrated steady organic growth.

“Their extensive niche expertise in retail, construction, real estate, hospitality and benefits will enhance the value we deliver to our clients and significantly expand our capabilities in the region.”

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Eastern Insurance operates through 22 non-branch offices that are located primarily in eastern Massachusetts, US.

In a press statement, Eastern said: “After careful consideration of Eastern’s long-term goals, the transaction is being made to recognise the valuation premium of Eastern Insurance while allowing Eastern to focus on the growth and strategic initiatives of its core banking business, including the announced merger with Cambridge.”

In a separate announcement, Eastern Bank has signed a definitive merger agreement with Cambridge Bancorp, the parent company of Cambridge Trust Company.