FRANKFURT, March 20 (Reuters) - Munich Re is

buying the 71% of Next Insurance that it doesn't already own,

strengthening its foothold in the United States and valuing the

California-based company at $2.6 billion, a division of the

German company said on Thursday.

Ergo, the primary insurance business of reinsurer Munich Re,

will become the sole owner of Next, which is focused on insuring

U.S. small businesses.

Until now, Next investors have included Allianz,

Alphabet and American Express ( AXP ).

It is the latest in a spate of deals affecting German

insurance companies.

"We will tap 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 purchase 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 expected to close in the third quarter

pending regulatory approval.

Among recent activity in the industry, a consortium that

includes Allianz, BlackRock and T&D Holdings ( TDHOF ) are investing in

Viridium Group in a 3.5 billion euro ($3.79 billion) deal that

will see private equity company Cinven exit as a majority

investor.

Allianz also said this week that it would exit a joint

venture in India as it seeks a new partner there.

($1 = 0.9234 euros)