Sampo and Rand Merchant Investment Holdings (RMI) are set to acquire UK Property & Casualty (P&C) insurance company Hastings Group Holdings.

The transaction is valued at around £1.66bn ($2.2bn)or around €1.84bn with each share priced at £250.  This includes entire issued and to be issued share capital not currently owned or controlled by Sampo and RMI.

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To acquire Hastings, Sampo and RMI have formed a jointly owned company.

Following the completion of the offer, Sampo will own and control 70% of the shares and votes in the jointly owned company while RMI will own 30%. RMI currently holds 29.7% stake in Hastings.

Based on its 70% stake, the size of Sampo’s investment is expected to be £1.16bn ($1.5bn).

The company intends to fund its part of the acquisition with around €1bn of newly issued hybrid Tier 2 capital with the residual from existing cash reserves.

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This acquisition follows Sampo’sstrategic ambition to expand further into non-life insurance. The company also intends to expand its existing footprint to the UK.

Hastings, which is one of the leading motor insurers in the UK, has recently been diversifying into other non-life insurance products including home insurance.

According to Sampo, Hastings will be able to bolster its agile and digital business model to create long-term value under its ownership along with that of RMI.

Sampo and RMI expect the scheme to become effective by year-end after the satisfaction of regulatory approvals.