Liberty Mutual to Acquire Safeco Corporation - BodyShop Business

Liberty Mutual to Acquire Safeco Corporation

Liberty Mutual Group and Safeco Corporation announced that they have entered into a definitive agreement where Liberty Mutual will acquire all outstanding shares of Safeco for $68.25 per common 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’s 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 direct written premium of $20.2 billion, while Safeco had 2007 direct written premium of $5.9 billion.

Recent statistics place Liberty Mutual ninth in the U.S. for total private passenger auto insurance and Safeco at number 13. The newly combined company would rank seventh in the U.S. by total direct premiums written. This would place it slightly below Nationwide in auto insurance market share, and comfortably above USAA.

Following the transaction, Safeco will become part of Liberty Mutual Group’s Agency Markets business unit. Combined, the organization will have about 15,000 independent agencies.

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