April 5 (Reuters) - Arch Capital Group's ( ACGL ) 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.