Boston – Liberty Mutual Group, which has headquarters here, is acquiring Fairfield, Ohio-based Ohio Casualty Corp. for $44 per share in cash. The transaction is valued at about $2.7 billion.
Ohio Casualty Generated $1.4 Billion in net written premium in 2006 and had pre-tax income of $300 million. It is the holding company for The Ohio Casualty Insurance Company and five other property and casualty insurance companies, known collectively as the Ohio Casualty Group.
Ohio Casualty Group ranks 50th among property and casualty insurers based upon net premiums written, the company says, and sells personal, commercial and bond insurance products through independent agents and brokers.
Liberty Mutual says it intends to fund the purchase with cash on hand and short-term debt. The transaction is not subject to any financing contingencies. Although the deal has been approved by the boards of both companies, it remains subject to approval by Ohio Casualty shareholders and regulatory bodies. It is expected to close in the third quarter.
Following the acquisition, Ohio Casualty will be part of Liberty Mutual Group’s Agency Markets business unit. The 11 companies in the unit have more than 6,800 employees and about 6,500 appointed agencies. In 2006, Liberty Mutual Agency Markets’ net written premium was $5.9 billion.
Ohio Casualty, which has approximately 2,100 employees and operations in 48 states, has about 3,400 appointed agencies. In 2006, Ohio Casualty’s net written premium was $1.4 billion.
“Under Dan Carmichael’s leadership, Ohio Casualty has been transformed into a premier regional property and casualty company and is a great fit with our Agency Markets business,” says Edmund F. Kelly, Liberty Mutual Group chairman, president and chief executive officer. “Through the addition of Ohio Casualty, our regional-company independent agency business is significantly stronger and our agency relationships are strengthened.”
With combined net written premium exceeding $7.3 billion after the transaction, the resulting company will be the largest regional provider of property and casualty products distributed through independent agents in the United States, Kelly says.
Dan Carmichael, president and chief executive of Ohio Casualty, says he is “very proud of the accomplishments of our employees, agents and management at Ohio Casualty in creating a leading super-regional property and casualty insurance company. We look forward to being an important component of Liberty Mutual Agency Markets’ continuing success.”
Gary Gregg, president of Liberty Mutual Agency Markets, will play a key role in the joint integration team working to combine the best of both organizations to create a stronger Liberty Mutual Agency Markets, the company says.
“We share Ohio Casualty’s commitment to employees, customers and agents,” says Gregg. “The combined organization intends to maintain a significant presence in the Cincinnati area and will continue to support local charities in the communities in which we do business.”
Boston-based Liberty Mutual Group is a diversified global insurer and sixth largest property and casualty insurer in the United States, based on 2005 direct written premium, the company says.
The Company also ranks 95th on the Fortune 500 list of largest corporations in the United States, based on 2006 revenue of $23.5 billion. As of Dec. 31, 2006, Liberty Mutual Group had $85.5 billion in consolidated assets.
Liberty Mutual Group offers insurance products and services that include personal automobile, homeowners, commercial multiple peril, commercial automobile, general liability, workers compensation, global specialty, group disability, assumed reinsurance, fire and surety.
The company employs more than 39,000 people in more than 900 offices hroughout the world.
Ohio Casualty Corp. is the holding company of The Ohio Casualty Insurance Co. and five other subsidiary insurance companies. With approximately 2,100 employees in five major locations, the company is ranked among the top 50 U.S. property/casualty insurance groups based on net premiums written.
Ohio Casualty Group is the brand for six property/casualty insurance companies, which are licensed to write auto, home and business insurance. Policies are written through the independent agency system.
The oldest company, The Ohio Casualty Insurance Co., was founded in 1919. OCG products are marketed through approximately 3,400 independent agencies.
Policies may be underwritten by The Ohio Casualty Insurance Co., West American Insurance Co., American Fire and Casualty Co., Ohio Security Insurance Co., Avomark Insurance Co. or Ohio Casualty of New Jersey Inc.
Source: Liberty Mutual Group
