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MAPFRE agrees to buy Safety Insurance Group for $105 a share
The deal values Safety Insurance Group at $1.54 billion and includes projected pretax cost synergies of more than $30 million per year over three years.
MAPFRE has agreed to buy Safety Insurance Group in a cash deal at $105 per share, a 44% premium over Safety's stock price on July 23. The purchase price totals $1.54 billion, according to the transaction terms described by Insurance Business.
The acquisition is expected to consolidate MAPFRE's already established presence in Massachusetts rather than open a new market. MAPFRE operates in the state through its Commerce Insurance brand and is estimated by the company to be the largest home and auto insurer under that name.
After the deal closes, the combined operation is projected to become the second-largest writer of private passenger auto insurance in New England and the region's largest writer of both homeowners and commercial auto coverage, based on MAPFRE estimates. Safety, meanwhile, is a Boston-incorporated insurer that has grown around independent agent distribution since it started writing motor vehicle policies in January 1980.
MAPFRE projects more than $30 million a year in pretax cost synergies once integration is fully run-rated within three years, and expects the deal to lift overall net income by more than 5% over the same period. The companies also said Safety will keep its brand, Boston base, and relationships with policyholders and independent agents, and will operate as a sister company alongside MAPFRE's other US brands rather than being absorbed into Commerce.