Chubb Ltd.
CB -2.63%
, one of the country’s largest, oldest and most well-known real estate accident insurers, has made a proposal to acquire Hartford Financial Services Group Inc.,
HIG 18.71%
another name in the industry.
Connecticut-based Hartford said in a release Thursday afternoon that it had received an “unsolicited, non-binding proposal from Chubb” to acquire the 211-year-old company. Hartford said his board “is carefully considering the proposal with the help 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 strategically and financially compelling for both sets of shareholders and other constituencies.”
The offer is at $ 65 12% higher than the opening price of the share 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 look forward to constructive, private discussions to quickly complete a fair transaction that is to the benefit of all our respective stakeholders,” Chubb said in the statement.
The offer indicates that Chubb CEO Evan Greenberg is ready for another daring deal.
In 2016, Mr. Greenberg was CEO of business and home insurer Ace Ltd., when he teamed up with the then New Jersey-based Chubb Corp. combined in a transaction of about $ 30 billion. The merger made Chubb an international powerhouse.
Mr Greenberg and his team delivered 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 by 2.6% with the close of the market.
After news of Chubb’s takeover approach for Hartford was reported by Bloomberg News on Thursday, Hartford’s shares rose. They jumped even further after the insurer’s news release to complete the day with almost 19%. The market capitalization is about $ 24 billion.
Hartford was one of the US insurers hit hardest by the collapse of world markets in 2008-09. The firm provided federal assistance, which he has since repaid in full. In the years that followed, Hartford sold various units to focus primarily on casualty insurance for businesses and individuals, offers for employer benefit programs, and mutual funds.
CEO Christopher Swift has made a number of acquisitions over the past few years as the company has narrowed its focus. The transactions include the purchase of a specialty insurer, Navigators Group, and a unit of Aetna Inc. which provides life insurance, disability income and other products for employees’ benefits to employees.
Prior to his merger with Ace, Chubb was known to the public as a leading provider of homeowners insurance to wealthy Americans through his expensive but extensive coverage of the Masterpiece.
David Motemaden, an analyst at Evercore ISI, said Hartford was a logical choice for a company like Chubb, which was trying to strengthen its operations to secure small business customers. In a research note, he says Hartford’s small-commercial franchise could complement Chubb’s leading position in large company insurance, while Hartford’s venture to insure middle companies would strengthen Chubb’s operations in that part of the market.
Hartford said in his release that his board “is committed to acting in the best interests of shareholders in the long run.”
Write to Leslie Scism by [email protected]
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On March 19, 2021, the print edition appeared as ‘Chubb Bids For Rival Hartford’.