Liberty Mutual Group will buy peer Safeco Corp. for $6.2 billion in cash to become the fifth-largest property and casualty insurer in the U.S.
The companies said in a joint statement that Liberty Mutual will pay $68.25 per share for its rival, representing a premium of 51% over the closing share price of $45.23 on Tuesday. The purchase will offer some comfort to Safeco shareholders as the Seattle-based company's stock has fallen by a third since February 2007 as it was forced to use a higher percentage of premium income to pay out claims.
Boston-based Liberty said in the statement it is making the purchase so that it can expand its business in the U.S. and in particular build up is surety business, which provides guarantees against defaults between two other parties. -
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Liberty Mutual's acquisition of Safeco.
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