Through the mutual transaction and merger, originally announced in July, Liberty Mutual adds $2.3 billion in premium and becomes the second-largest carrier in the independent agent channel.
Under the terms of the agreement – which received all required regulatory approvals – State Automobile Mutual Insurance Company members became mutual members of Liberty Mutual Holding Company Inc. and Liberty Mutual acquired all of the publicly held shares of common stock of State Auto Financial Corp. for $52 per share in an all-cash-deal of approximately $1 billion. The companies will continue to operate as separate businesses throughout most of 2022.
"Across Liberty Mutual and State Auto, we have a shared commitment to the Independent Agency channel and being the carrier of choice for independent agents," said Liberty Mutual President & COO, Global Retail Markets US, Hamid Mirza. "We are closely aligned in how we put people first, strive to make things better, and behave with integrity every day. Together, we'll be a leader in both the personal lines and small commercial insurance markets, helping policyholders when they need it most and giving our people more opportunities to grow and thrive."
With the completion of the acquisition, Liberty Mutual also confirms the immediate appointment of Kim Garland as president of State Auto. Garland was most recently the company's senior vice president of personal and commercial lines and managing director of State Auto Labs. He added, "We bring together two organizations of passionate, driven, and talented individuals. Our combined strength allows us to significantly expand our relationships with independent agents and brokers, and make more strategic investments in the independent agent channel to continue driving profitable growth."
Waller Helms Advisors LLC and Goldman Sachs & Co. LLC acted as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Liberty Mutual in the transaction.
Houlihan Lokey Capital, Inc. acted as financial advisor and Kirkland & Ellis LLP acted as legal advisor to the Special Committee of Independent Directors of State Auto Financial Corp. in the transaction.
Keefe, Bruyette & Woods, a Stifel Company, and BofA Securities, Inc. acted as financial advisors and Squire Patton Boggs (US) LLP acted as legal advisor to the Special Committee of Independent Directors of State Auto Mutual in the transaction.