Safeco Acquired, Another P&C Insurer Disappears (SAF)

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Liberty Mutual has agreed to acquire Safeco Corp. (NYSE: SAF) for some $6.12 billion this morning. Liberty offered to purchase all outstanding common shares at $68.24 per share, representing roughly a 50% premium to the closing price on Tuesday.

Safeco sells $5.9 billion worth of insurance policies annually, compared to Liberty Mutual selling some $20 billion annually. The deal will create the country’s fifth largest property insurer with a combined 15,000 independent agencies. Safeco will join Liberty Mutual’s Agency Markets business unit.

Safeco operates in personal insurance, business insurance, surety, and "P&C Other."

The boards of both companies have approved the merger and the deal is expected to close by the end of the third quarter upon regulatory and shareholder approval.

Safeco shares jumped almost 50%, or $20.88, in early morning trading to $66.11. The 52-week range is $41.09 to $67.32.

Maybe not all insurance carriers and not all financial companies are carrying the financial asbestos on their books.

Jon C. Ogg
April 23, 2008