Arch Capital Group’s North American insurance unit said on Friday it would buy the U.S. midcorp and entertainment insurance businesses from Allianz Global Corporate and Specialty SE for $450 million in cash.

The deal will help expand Arch’s footprint in the middle market segment — companies smaller than multinational corporations but larger than typical small businesses — in the United States.

After a nearly two-year dry spell, mergers and acquisitions are bouncing back in 2024 on strong expectations of interest rate cuts and a rally in the markets.

“This transaction will enhance our distribution relationships, broaden our product suite and expand our ability to participate in these underwriting-intensive middle-market lines,” said Matt Shulman, CEO of Arch Insurance.

Nearly 500 employees of Allianz are expected to move to Arch Insurance North America as part of the transaction, the companies said.

The deal, expected to close in the second half of 2024, will need a capital requirement of about $1.4 billion to support the business.

Goldman Sachs & Co and J.P. Morgan Securities are acting as the financial advisers to Arch.

(Reporting by Pritam Biswas in Bengaluru; Editing by Shilpi Majumdar)