When Boston’s Liberty Mutual Group plunked down $6.2 billion to acquire Seattle’s Safeco Corp., the move elicited more mild surprise than shock.
Mark Gorman, principal of Saint Paul, Minn.-based Mark B. Gorman & Associates LLC says the news confirms a widespread expectation that large-scale merger and acquisition (M&A) activity would eventually occur in the insurance space as it had in other financial services sectors. Indeed, Liberty had indicated it was willing to spend a nice chunk of change to grow the company after spending $2.7 billion to acquire Ohio Casualty Insurance Co. last year. With the deal, Safeco will become part of Liberty Mutual Group’s Agency Markets business unit, which had revenues of $5.6 billion in 2007.
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