LONDON (AP) _ Royal & SunAlliance Insurance Group PLC has agreed to buy the U.S. insurance company Orion Capital Corp. for $1.4 billion.

The deal announced Monday would give Orion shareholders $50 a share, a 23 percent premium over its Friday closing share price and a 65 percent premium from the share price a month ago.

Orion shares soared 16, or by $6.56 1/4, to close at $47.31 1/4 a share on the New York Stock Exchange.

Both boards have approved the transaction, Royal & SunAlliance said.

The British insurance company operates in more than 55 nations, and is currently among the top 30 insurers in the United States, the company said.

``This transaction effectively doubles the size of Royal & SunAlliance U.S.A.,'' said Group Chief Executive Bob Mendelsohn. His company had 3,500 employees in the United States and Orion, based in Farmington, Conn., currently employs 3,900.