QBE has bought Elders Insurance and taken up a majority stake in its insurance agency business for a total of $315 million.

The deal hands QBE an additional $400 million in forecast gross written premium as well as a significant stake in Australia’s largest rural services network. It already provides Elders’ underwriting and reinsurance, and has owned shares in the company since 2001.

QBE will acquire 100% of the shareholding in Elders Insurance and 75% of Elders Insurance Agency. Elders Limited – which is struggling under a debt-laden balance sheet – will retain 25% of the agency business with an option to later take back an additional 25%.

The businesses will continue under the Elders brand, and Financial Services MD Tim Plant comes with the deal as MD of Elders Insurance and Elders Agency.

Both companies have a long history in Australia, with Elders being established as a stock and station agency in 1839 and QBE as a general insurer in 1886.

Net tangible assets at the date of acquisition are estimated at $105 million, while forecast net profit from the Elders operations are expected to boost QBE’s net profit by $30 million next year.

The transaction is financed from QBE cash resources and is expected to be complete before September 30.