Liberty Mutual Group Will Become Fifth Largest U.S. Property and Casualty Insurer Based on Combined 2007 Direct Written Premium of $26.2 Billion
Boston, Mass. & Seattle, Wash. – Liberty Mutual Group (“Liberty Mutual”) and Safeco Corporation (“Safeco”) (NYSE: SAF) today announced that they have entered into a definitive agreement pursuant to which Liberty Mutual will acquire all outstanding shares of common stock of Safeco for $68.25 per share in cash.
The proposed transaction, which is valued at approximately $6.2 billion, has been approved by the Boards of Directors of both companies. It is subject to approval by Safeco’s shareholders as well as the customary regulatory approvals and conditions. The transaction is expected to close by the end of the third quarter of 2008. The transaction is not subject to financing contingencies.
Upon completion of the transaction, Liberty Mutual will become the fifth largest property and casualty insurer in the United States. Currently, Liberty Mutual Group is the sixth largest property and casualty insurer in the United States based on the company’s 2007 direct written premium of $20.2 billion, while Safeco had 2007 direct written premium of $5.9 billion.
Following the transaction, Safeco will become part of Liberty Mutual Group’s Agency Markets business unit. Liberty Mutual Agency Markets had revenues of $5.6 billion in 2007. Combined, the organization will have about 15,000 independent agencies.
“The addition of Safeco significantly expands and strengthens the Liberty Mutual Group,” said Edmund F. Kelly, Liberty Mutual Group chairman, president and chief executive officer. “Safeco’s operations and product mix complement our existing Agency Markets operations. Additionally, both organizations have superb Surety businesses which when combined will form the second largest Surety business in the United States.”
Safeco president and chief executive officer Paula Reynolds said, “This is the opportunity to take West Coast inventiveness and launch it with a global brand at a substantial premium to Safeco shareholders.”
Gary Gregg, president of Liberty Mutual Agency Markets, said, “Safeco is an excellent addition to Liberty Mutual Agency Markets and I look forward to working with the Safeco leadership team to deliver even greater value to our independent agent partners. With revenue approaching $12 billion, Agency Markets will rank third in personal and fifth in commercial property and casualty products distributed through independent agents in the United States. Just as important, we share Safeco’s commitment to employees, customers, agents and the communities in which we do business.”
In light of the proposed transaction, Safeco has postponed its previously scheduled annual meeting of shareholders to have been held on May 7, 2008. Safeco will provide information on the timing of the annual and special shareholder meeting to approve the transaction announced today when available.
Safeco has been advised by Morgan Stanley & Co. Incorporated and Skadden, Arps, Slate, Meagher & Flom, LLP in connection with this transaction.
About Liberty Mutual Group
Boston-based Liberty Mutual Group is a diversified global insurer and sixth largest property and casualty insurer in the U.S. based on 2007 direct written premium. The Company also ranks 94th on the Fortune 500 list of largest corporations in the U.S. based on 2007 revenue. As of December 31, 2007, Liberty Mutual Group had $94.7 billion in consolidated assets, $82.3 billion in consolidated liabilities, and $25.9 billion in annual consolidated revenue.
Agency Markets, a major business unit of the Liberty Mutual Group focusing on independent agency distribution, had $5.2 billion in net written premium in 2007 and has approximately 7,000 employees.
Liberty Mutual Group offers a wide range of insurance products and services, including personal automobile, homeowners, commercial multiple peril, commercial automobile, general liability, surety, workers compensation, global specialty, group disability, assumed reinsurance and fire.
Liberty Mutual Group (www.libertymutualgroup.com) employs over 41,000 people in more than 900 offices throughout the world.
About Safeco Corporation
Safeco provides insurance for individuals and for small- and mid-sized businesses. Safeco offers a wide array of property and casualty insurance products, including personal auto and home as well as coverage for small- and mid-sized businesses, and surety bonds. Safeco sells its products through a national network of agents and brokers. Safeco’s business helps people protect what they value and deal with the unexpected.Tags: Acquisition, Liberty Mutual, Safeco