Chubb Ltd.
CB -2.63%
, one of the largest, oldest and most well-known real estate insurers in the country, has made a preliminary proposal to acquire the Hartford Financial Services Group Inc.,
HIG 18.71%
another well-known name in the industry.
Connecticut-based Hartford said in a statement Thursday afternoon that it “has received an unsolicited and non-binding proposal from Chubb” to acquire the 211-year-old company. Hartford said his board “is carefully studying the proposal with the assistance of its financial and legal advisers.”
In a statement after the market closed, Chubb said the proposal would value Hartford at $ 65 per share, saying the combination “would be compelling strategic and financial for shareholders and other constituencies.”
At $ 65, the offer is 12% higher than the opening price of shares on Thursday of $ 57.94. Chubb said he submitted his proposal on March 11.
“We have not yet received a response to our proposal, but we look forward to a constructive and private debate in order to quickly complete a fair transaction that benefits all of our respective stakeholders,” Chubb said in the statement.
The offer indicates that Chubb CEO Evan Greenberg is ready for another bold deal.
In 2016, Mr. Greenberg was CEO of business and home insurer Ace Ltd. when he combined it with the then New Jersey-based Chubb Corp. in a deal worth about $ 30 billion. The merger turned Chubb into an international power.
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 as of Thursday. Its shares fell 2.6% at the close of the market.
After Bloomberg News first reported on Chubb’s acquisition approach by Hartford on Thursday, Hartford’s shares rose. They jumped even higher after the insurer’s afternoon press release, to end the day by almost 19%. Its market capitalization stands at about $ 24 billion.
Hartford was one of the hardest hit U.S. insurers during the 2008-09 global market crash. The firm received federal aid, which it has since paid in full. In later years, Hartford divested several units to focus primarily on real estate victim insurance for businesses and individuals, offers for employer benefit programs, and a mutual fund business.
Its CEO, Christopher Swift, made some acquisitions over the past few years as the firm reduced its focus. These agreements include the purchase of a business insurer, Navigators Group, and a unit of Aetna Inc. which provides life insurance, disability income and other products for corporate employee benefit programs.
Prior to his merger with Ace, Chubb was known to the public as a leading homeowners insurance provider to wealthy Americans across his face, but extensive coverage of the masterpiece.
Evercore ISI analyst David Motemaden said Hartford was a logical choice for a company like Chubb, which is trying to bolster operations to secure small business customers. In a research note, he said Hartford’s small business franchise could complement Chubb’s leadership position in insuring large companies, while Hartford’s business of insuring medium-sized companies would strengthen Chubb’s operations in this part of the world. market.
Hartford said in a statement that its board of directors “is committed to acting in the best interests of long-term 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.”