London's Benfield Greig is to pay $165.4m (£116m) to take over Dallas-based reinsurance specialist EW Blanch Holdings.

A tender offer has been accepted by more than 94% of EW Blanch shareholders.

Benfield Greig claims that the deal will make it the third largest reinsurance broker in the world, with combined revenues of $410m (£288m) on 2000 figures, behind Marsh subsidiary Guy Carpenter and Aon.

It will pay $13.50 (£9) for the 12.3 million shares tendered and will then acquire the remaining 6% at the same share price.

Benfield's CEO Grahame Chilton said the deal would give the company a much greater US presence. “It will reinvigorate the US business using the Benfield Blanch brand, while significantly enhancing reach for our US customers and driving growth forward,” he said.

The two businesses are roughly of equal size but experienced very different fortunes last year. While Benfield Greig recorded a pre-tax profit of $54.5m (£38m), EW Blanch suffered a loss of $13.3m (£9.36m), blamed on workers' compensation claims and a fall in brokerage.

Benfield Greig has seven offices in the US and two in Canada. Its North American account is still developing and accounts for just 1% of revenue.

The group will trade in the US under the name Benfield Blanch. It will continue to trade in the London Market under the Benfield Greig name.

Benfield Greig has pulled off several acquisitions in recent years. In 1997, it took over the larger reinsurance broker Greig Fester for £120m, and bought US reinsurance intermediary Bates Turner from GE Capital at the end of 1999.