Liberty Mutual Group's surprise announcement that it plans to acquire Safeco Corp. for $6.2 billion was met with positive comments from independent agent representatives, but cautious skepticism by rating agencies concerned about the deal's financing.
Liberty Mutual said it will pay $68.25 per share in cash for Safeco–a 51 percent premium over the carrier's share price of $45.25 when the stock market opened on April 23, the day the deal was announced. (Safeco shares closed up 46 percent to $65.94 by day's end.)
The proposed transaction, approved by the boards of both companies, is subject to approval by Safeco's shareholders as well as regulators. The deal would make Liberty Mutual the fifth-largest U.S. property-casualty insurer. As of 2007, the combined 2007 direct written premium of the firms was $26.1 billion.
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