USI Insurance Services has agreed to acquire Wells Fargo’s commercial insurance business for an undisclosed sum.
USI said that Wells Fargo Insurance Services USA includes its insurance brokerage and consulting businesses, in addition to its employee benefits and property and casualty national practices.
According to reports, USI fended off competition from Alliant and Hub to acquire the business from the San Francisco-based bank.
In its statement, USI said that PSP Investments and Caisse de dépôt et placement du Québec (CDPQ) provided a portion of the committed financing for the transaction.
While the sale consideration was not disclosed, reports have suggested that the Wells Fargo unit could be worth about $2bn.
“This is a transformational transaction for both USI and Wells Fargo Insurance,” remarked USI chairman and CEO Michael Sicard.
“Together, we create a premier industry leader with an un-matched team of exceptional sales consultants, account executives, technical resources and team members,” he added.
Meanwhile, head of Wells Fargo wholesale banking Perry Pelos said that the sale of the commercial insurance business reinforces Wells Fargo's focus on core banking products and services that best meet the needs of its customers and support strong financial returns for shareholders.
Wells Fargo has a track record of transacting with USI, including a 2014 deal that saw the investment bank sell 42 offices to the broker.
Meanwhile, USI only closed its own change of ownership in May, when KKR and CDPQ bought out Onex in a deal valuing the broker at $4.3bn or 12x earnings.
The transaction is expected to close in the fourth quarter of 2017.