By Tom Sims and Alexander Hübner

FRANKFURT (Reuters) -Munich Re is buying the 71% of Next Insurance that it doesn’t already own, strengthening its foothold in the US and valuing the California-based company at $2.6 billion, a division of the German company said on Thursday. Ergo, the first insurance business of reinsurer Munich Re, will turn out to be the only owner of Next, which is concentrated on insuring U.S. small businesses. Until now, Next investors have included Allianz, Alphabet and American Express. It’s the newest in a spate of deals affecting German insurance firms.

“We are going to tap right into a highly attractive market overseas, unlocking significant growth,” Ergo’s CEO Markus Riess said.

Next was founded in 2016 and now has around 700 employees and 600,000 customers.

Munich Re and Ergo have been investors since 2017.

Ergo said the acquisition will increase net results by a mid three-digit million dollar amount over the medium term, which suggests an amount of around $500 million.

The acquisition is anticipated to shut within the third quarter pending regulatory approval.

Amongst recent activity within the industry, a consortium that features Allianz, BlackRock and T&D Holdings are investing in Viridium Group in a 3.5 billion euro ($3.79 billion) deal that may see private equity company Cinven exit as a majority investor.

Allianz also said this week that it will exit a three way partnership in India because it seeks a recent partner there.

($1 = 0.9234 euros)

(Reporting by Tom Sims; Editing by Miranda Murray and Susan Fenton)