Liberty Mutual Cleared to Acquire Safeco
The mandated waiting period required for the proposed acquisition of Safeco by Liberty Mutual has expired. The expiration of the waiting period, required by the Hart Scott Rodino Antitrust Act, satisfies a condition to the closing of the proposed acquisition the companies announced in April in which Liberty Mutual would buy Safeco for about $6.2 billion.
The transaction is expected to be completed by the third quarter.
Liberty Mutual's acquisition of Safeco will put the carrier in the fifth spot among U.S. property/casualty insurers. The company is currently the sixth largest and was the seventh largest two years ago.
Liberty Mutual will have about 15,000 independent agencies when the acquisition is complete. Last August, it completed the $2.7 billion purchase of Ohio Casualty — adding its $1.4 billion in net written premiums in 2006 to the Agency Markets.
The transaction is not subject to financing contingencies, according to a statement A.M. Best Co. issued following the announcement. Without access to capital markets, the purchase will be funded by cash and up to $1.5 billion of debt, A.M. Best Co. said. "Liberty Mutual will have limited financial flexibility for future events relative to its ratings based on current financial leverage measures," it noted (BestWire, April 25, 2008).
Liberty Mutual also recently announced a joint-venture agreement with Dabur GI Invest Group to offer personal and commercial protection in India.
Source: Source: Bestweek | Published on June 6, 2008
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