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Liverpool Victoria Insurance Company is set to take over British motor insurer Highway Insurance Plc in a deal worth around £150 million.

The 75p-a-share transaction represents a premium of about 47 per cent to Highway's closing price of 49.75p on 26 August.

Liverpool Victoria said there was "strong industrial logic" to the new enlarged general insurance business.

The £150 million deal is the latest step in Liverpool Victoria's expansion plans, which entail becoming one of the top five insurers in its markets by 2012.

Andrew Gibson, Highway Insurance CEO, said the offer was "an attractive financial result" and that the combined business would have "greater resources to capitalise on opportunities in the broader general insurance market".

Highway’s posted pre-tax profit in the first six months of 2008 of £1.4 million compared with £11.8 million last year.

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