Dec 2 (Reuters) - The Baldwin Group said on

Tuesday it will buy rival insurance broker CAC Group in a $1.03

billion cash-and-stock deal, adding to a string of mergers in

recent years as industry consolidation accelerates.

U.S. insurance brokers have looked past bolt-on acquisitions

and turned to billion-dollar deals over the past two years to

boost their market presence and strengthen their competitive

edge.

In August, Arthur J. Gallagher ( AJG ) bought

AssuredPartners for $13.45 billion, while Brown & Brown ( BRO )

acquired Accession in a $9.83 billion deal.

The acquisition of CAC will strengthen Baldwin's presence in

the middle-market segment, which caters to companies smaller

than multinational corporations but larger than typical small

businesses.

Baldwin will also get access to CAC's expertise in

industries such as private equity, real estate, senior living,

education, and construction as well as specialty product lines.

As part of the deal, Baldwin will pay $438 million in cash

and 23.2 million shares worth $589 million.

The combined entity is expected to generate over $2 billion

in gross revenue next year. CAC's executive chairman Paul Sparks

will join Baldwin's board as part of the deal.