American Financial Group, Inc. has reached an agreement toacquire Summit Holdings Southeast, Inc and its related companiesfrom Liberty Mutual Insurance for $250 million.

AFG says Summit, a workers' compensation insurer based inLakeland, FL, will continue to operate under the Summit brand as amember of AFG's Great American Insurance Group.

AFG's says its total capital investment in Summit will beapproximately $400 million, inclusive of a capital contribution byAFG at closing, which is expected to occur “in the first or secondquarter of 2014, following customary regulatory approvals.”

Carl H. Lindner III, co-CEO of AFG, says, “Summit has anexcellent long-term track record of underwriting outperformance. Wevalue its underwriting discipline, talented management team andvalue-based service model. Their business model fits well with ourP&C Group's strategic focus and complements our Great AmericanInsurance Group specialty workers' compensation offerings availablethrough our other specialty P&C businesses. We look forward towelcoming Carol Sipe, Summit Group's president and CEO, and herteam to the AFG family.”

A.M. Best, commenting on the acquisition, says the bbb+ issuercredit rating and all debt ratings of AFG, as well as the Afinancial strength rating and a ICRs of of Summit's insurancesubsidiaries—Bridgefield Employers Insurance Company andBridgefield Casualty Insurance Company—are all unchanged. A.M. Bestsays, “The transaction has no effect on AFG's financial leveragemeasures as no external financing is utilized.”