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Liberty Mutual Insurance Bolsters Independent Agent Network With Agreement to Acquire State Auto Group
Industry: Insurance
Type: Buy-Side M&A

Liberty Mutual Holding Company Inc. (“Liberty Mutual”), State Automobile Mutual Insurance Company (“State Auto Mutual”), and State Auto Financial Corporation (NASDAQ: STFC) (“State Auto Financial”) announced today that they have signed a definitive agreement pursuant to which Liberty Mutual would acquire State Auto Group, a super-regional insurance holding company headquartered in Columbus, Ohio.  Under the terms of the agreement, State Auto mutual members will become mutual members of Liberty Mutual and Liberty Mutual will acquire all of the publicly held shares of common stock of State Auto Financial for $52 per share in cash.

The acquisition will significantly expand Liberty Mutual’s position as an industry leader for personal lines and small commercial insurance. Liberty Mutual today distributes its Safeco Insurance personal auto, homeowners and specialty products, and Liberty Mutual small business insurance through more than 10,000 independent agencies countrywide. Through the deal, Liberty Mutual will add $2.3 billion in premium and State Auto’s network of approximately 3,400 independent agencies across 33 states and is expected to become the second largest carrier in this key distribution channel.

The transaction was approved by the State Auto Financial board of directors (upon the recommendation of a special committee of independent State Auto Financial directors), as well as the State Auto Mutual board of directors (upon the recommendation of a special committee of independent State Auto Mutual directors). The deal is expected to close in 2022, pending State Auto Mutual member approval, State Auto Financial shareholder approval, receipt of required regulatory approvals and other customary closing conditions. In connection with the merger of State Auto Financial, State Auto Mutual has entered into a voting agreement with Liberty Mutual under which it has agreed to vote its 58.9% interest in State Auto Financial in favor of the merger.