MELBOURNE, Australia (AP) — Insurance Australia Group Ltd. yesterday said it bought British motor underwriter and broker Equity Insurance Group for about $1.13 billion.“Equity is an ideal fit with our acquisition criteria in stable yet profitable markets like the UK — it’s a motor-led insurance business with consistently high margins in its markets and a strong management team,” IAG chief executive Michael Hawker said in a statement.

He said the purchase was expected to add ten percent to earnings per share in the 2008 financial year.

The acquisition, which is subject to regulatory approval, is expected to be completed in the first quarter of 2007.

Equity’s management team will continue to be led by chief executive Neil Utley, who will join IAG’s executive team, Hawker said.

The Australian company said it would fund the purchase with an equity placement of 600 million Australian dollars ($474 million) and additional capital being raised from a share purchase plan to eligible shareholders.

The balance will be sourced from internal funds and subordinated debt, the statement said.