Liberty Mutual acquire Safeco for $6.2bn
After years of speculation and six months of discussions, Boston-based Liberty Mutual Group has finally agreed terms to acquire Seattle-based insurer Safeco in a cash deal worth $6.2 billion.
Liberty Mutual will pay $68.25 per share, 45.7% higher than the Tuesday stock price of $45.23. Most of the purchase price is to be paid with for available cash, but $1.5 billion of the price is new debt for the company.
Analysts have expressed their ‘surprise’ at the amount Liberty Mutual is willing to pay.
The acquisition will be Liberty Mutual’s biggest ever, and makes the company the fifth largest property and casualty insurer in the USA. It follows the group’s acquisition of Ohio Casualty last year.
Liberty Mutual provides home insurance, motor insurance, general liability, workers compensation insurance, assumed reinsurance and fire insurance. It sells its policies through independent agents.
Safeco provides insurance to small and medium sized enterprises. it is to be subsumed into LMG’s agency markets business unit.
Liberty Mutual’s CEO Ted Kelly has said that jobs will be lost in both companies.
Commentators in Seattle have expressed concern for the city’s economy, and are upset at the city losing one of its major business icons.
Category: Companies News, Insurance News
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