Chubb Ltd.
? B -2.63%
, one of the largest, oldest and most well-known real estate accident insurers in the country, has made a preliminary proposal to acquire Hartford Financial Services Group Inc.,
HELLO G 18.71%
another well-known name in the industry.
Hartford, Connecticut, said in a statement on Thursday afternoon that it had “received an unsolicited, non-binding proposal from Chubb” to acquire the 211-year-old company. Hartford said his board was “carefully considering the proposal with the assistance of its financial and legal advisers”.
In a post-market statement, Chubb said the proposal would value Hartford at $ 65 a share, saying the combination “would be strategically and financially compelling for both shareholder groups and other constituencies.” .
At 65 USD, the offer is 12% above the opening price of the action, on Thursday, of 57.94 USD. Chubb said he submitted his proposal on March 11.
“We have not yet received a response to our proposal, but we look forward to constructive and private discussions, in order to quickly consume a fair transaction that benefits all those stakeholders,” Chubb said in a statement.
The offer signals that Chubb’s CEO, Evan Greenberg, is ready for another bold agreement.
In 2016, Mr. Greenberg was the CEO of the home and business insurance company Ace Ltd., when he combined it with Chubb Corp., then headquartered in New Jersey, in a transaction of about $ 30 billion. The merger turned Chubb into an international power.
Mr Greenberg and his team have achieved strong financial results, and Chubb has become one of the world’s largest insurers, with a market capitalization of more than $ 75 billion since Thursday. Its shares fell 2.6% at the close of the market.
After news of Chubb’s takeover of Hartford was first reported by Bloomberg News on Thursday, Hartford’s stock rose. They jumped even more after the insurer’s press release, in the afternoon, to end the day with almost 19%. Its market capitalization amounts to about $ 24 billion.
Hartford was one of the hardest hit insurers in the US in the declining global markets of 2008-09. The company received federal aid, which it reimbursed in full. In the years that followed, Hartford sold various units to focus primarily on insurance for businesses and individuals, offers for employer benefit programs, and a mutual fund business.
Its CEO, Christopher Swift, has made several acquisitions in recent years as the company has reduced its focus. Those offers included the purchase of a specialized business insurer, the Navigators Group and a unit from Aetna Inc., which offers life insurance, disability income and other products for company programs for the benefit of employees.
Prior to its merger with Ace, Chubb was known to the public as a major homeowners insurance provider for wealthy Americans through its expensive but extensive masterpiece coverage.
Evercore ISI analyst David Motemaden said Hartford was a logical choice for a company like Chubb, which is trying to strengthen operations to secure small business customers. In a research note, he said Hartford’s small business franchise could complement Chubb’s leading position in securing large companies, while Hartford’s medium-sized insurance business would boost Chubb’s operations in that part of the market.
Hartford said in a statement that its board of directors “is committed to acting in the long-term interests of shareholders”.
Write to Leslie Scism at [email protected]
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It appeared in the March 19, 2021 print edition as “Chubb Bids For Rival Hartford.”