Royal & Sun to buy stake in GD II

LONDON --Royal & Sun Alliance Insurance Group PLC said Thursday it agreed to buy half of GD II - Global Direct Insurance Investments BV, a joint venture with Direct Insurance Financial Investments Ltd., for 88 million pounds ($175.4 million) to boost its presence in eastern Europe and Russia.

The company will pay an initial 44 million pounds ($87.7 million) in cash for the shareholding along with a further 44 million pounds ($87.7 million) to fund future growth, the company said in a statement.

"The joint venture is consistent with the group's emerging markets' strategy," Royal & Sun said in a statement.

GDI is Poland's leading direct motor insurer.

Completion of the transaction is subject to regulatory approval.

Royal & Sun shares fell 2.13 percent to 151.30 pence ($3.01) Thursday.