UPDATE 2-AIG to buy reinsurer Validus Holdings for $5.56 billion

* Deal for $5.56 bln in cash

* Offer represents 45.5 pct premium to Validus' last close

* Deal to immediately add to AIG's EPS and ROE (Adds background, shares)

Jan 22 (Reuters) - American International Group on Monday said it would buy Validus Holdings for $5.56 billion in cash to strengthen its reinsurance business, the company's first deal under Chief Executive Brian Duperreault.

Duperreault, who replaced Peter Hancock last year, is seen as a turnaround expert and has promised to streamline AIG's operations and improve its financial performance.

AIG's $68 per share offer represents a 45.5 percent premium to Validus' Friday close.

Validus, through its subsidiaries, offers crop insurance, and property and catastrophe reinsurance. Its Lloyd's of London syndicate business focuses on specialty insurance.

Reinsurers play a little-known but important role in the financial industry by assuming risks that are either too large or too unpredictable for their insurance clients to take on their own.

The Validus deal is expected to close in mid 2018 and immediately add to AIG's earnings per share and return on equity.

Citigroup Global Markets Inc, Perella Weinberg Partners LP and Debevoise & Plimpton LLP advised AIG. Validus was advised by J.P. Morgan Securities LLC and Skadden, Arps, Slate, Meagher & Flom LLP.

Shares of Bermuda-based Validus were trading close to the offer price before the bell. AIG shares were down 2.3 percent in premarket trading. (Reporting by Nikhil Subba and Sweta Singh in Bengaluru; Editing by Supriya Kurane)