Travelers Companies, Inc. has agreed to acquire The Dominion of Canada General Insurance Company from E-L Financial Corporation Limited for approximately $1.1 billion in cash, subject to adjustment.
The transaction is expected to close in 2013 Q4, subject to regulatory approvals and other customary closing conditions, notes a statement from Travelers. Travelers will fund the transaction, subject to market conditions, through a combination of debt and/or preferred stock financing and internal resources.
The Dominion and Travelers’ Canadian operations will be integrated, with the combined organization headquartered in Toronto.
“This transaction is consistent with our strategy to make thoughtful investments in attractive markets outside the United States,” says Jay Fishman, chairman and CEO of Travelers. “This is a very good opportunity for Travelers to significantly improve its market position and scale in a meaningful market,” Fishman notes, pointing out the transaction will have no significant impact on 2013 earnings per share.
“The Dominion’s extensive distribution network and established customer base provide us with an exceptional platform for expanding our commercial lines business and generally strengthening our presence in Canada,” Alan Schnitzer, vice chairman and head of Travelers’ Financial, Professional & International Insurance business segment, says in the statement. “The combined business will benefit from Travelers’ sophistication in the use of data and analytics as well as claim and risk control capabilities,” Schnitzer adds.
Brigid Murphy, president and CEO of The Dominion, will continue in these roles at the combined organization, while George Petropoulos, president and CEO of Travelers Canada, will help Murphy lead the new organization as vice chairman and executive vice president, Bond and Financial Products.
“We are looking forward to working with the Travelers Canada team as we begin this exciting new chapter, while continuing our commitment to the communities and organizations we serve,” Murphy says.
The combined business will offer a broad portfolio of insurance products. “The combination will substantially enhance Travelers’ product breadth in Canada by coupling The Dominion’s commercial and personal portfolios with Travelers Canada’s surety, management liability and commercial middle market products,” Petropoulos adds.