Latest news with #TravelersCanada
Yahoo
5 days ago
- Business
- Yahoo
Definity enters $2.4bn deal to buy most of Travelers Canada
Definity Financial Corporation has agreed to acquire the majority of Travelers' Canadian operations for a cash consideration of nearly C$3.3bn ($2.4bn). The assets to be acquired are the personal insurance business and most of the commercial insurance business of Travelers Canada, excluding its Canadian surety operations. Travelers Canada, with approximately C$1.6bn in annual gross written premiums, is a national property and casualty (P&C) insurer with a diverse portfolio. The deal is contingent on regulatory approvals and is due to be completed in the first quarter of 2026 (Q1 2026). Definity plans to fund the acquisition through C$281m from a bought deal private placement, C$70m from a private placement with the Healthcare of Ontario Pension Plan, C$1.5bn in excess capital and C$1.6bn in new debt. Upon finalisation, Definity is looking to divest C$1bn of the excess capital to repay a term loan, subject to regulatory approval. The acquisition is expected to position Definity as one of the five largest P&C insurers in Canada, with around C$6bn in combined annual premiums, the Definity press release said. It will also accelerate the transformation of Definity's commercial insurance platform and scale to its personal lines business. Definity president and CEO Rowan Saunders said: 'This is a transformative acquisition that is squarely in line with the growth strategy we have set for Definity, one that will move us into the top four largest P&C insurers in Canada. 'This highly complementary business will diversify our portfolios, provide additional expertise and product offerings, and continue our track record of shareholder value creation.' Travelers has stated that it intends to use approximately $700m of the net cash proceeds from the transaction for additional share repurchases in 2026, while retaining the balance for ongoing operations and general corporate requirements. Travelers chairman and CEO Alan Schnitzer stated: 'This transaction is a reflection of our steadfast commitment to disciplined capital allocation and long-term value creation. "The evolution of the Canadian market over the past decade has made Definity a natural long-term owner for this business, a view affirmed by the compelling value of their proposal.' Meanwhile, in March, Swiss Re agreed to divest its full 10.05% stake, amounting to 11,647,217 common shares, in Definity. "Definity enters $2.4bn deal to buy most of Travelers Canada " was originally created and published by Life Insurance International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
National Post
27-05-2025
- Business
- National Post
Travelers to Sell Its Canadian Personal Insurance Business and Majority of Its Canadian Commercial Insurance Business to Definity for US$2.4 Billion
Article content Article content NEW YORK — The Travelers Companies, Inc. (NYSE: TRV) today announced that it has signed a definitive agreement to sell the personal insurance business and the majority of the commercial insurance business of Travelers Canada to Definity Financial Corporation (TSX: DFY) for approximately US$2.4 billion. The purchase price represents a multiple of 1.8 times book value, adjusting for approximately US$0.8 billion of excess local capital which is being repatriated as part of this transaction in a tax-efficient manner. Travelers, which is the largest surety writer in North America, will retain its premier Canadian surety business. The transaction is expected to close in the first quarter of 2026, subject to regulatory approvals and other customary closing conditions. Article content 'This transaction is a reflection of our steadfast commitment to disciplined capital allocation and long-term value creation,' said Alan Schnitzer, Chairman and Chief Executive Officer of Travelers. 'The evolution of the Canadian market over the past decade has made Definity a natural long-term owner for this business, a view affirmed by the compelling value of their proposal. I am confident that our Canadian customers, brokers and colleagues will benefit from being part of one of the country's leading and fully integrated property casualty insurers.' Article content Travelers expects to use approximately US$0.7 billion of the net cash proceeds of the transaction for additional share repurchases in 2026, while retaining the remainder to support ongoing operations and for general corporate purposes. The transaction and resulting share repurchases are expected to be slightly accretive to the company's earnings per share in each of the next several years. Article content Jefferies LLC acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP and Stikeman Elliott LLP served as legal advisors to Travelers in this transaction. Article content Calculation of Book Value Multiple The price to book value multiple calculation excludes approximately US$0.8 billion of excess local capital from both the numerator (purchase price) and the denominator (book value). Book value is based on the equity of the entities being sold as of Dec. 31, 2024, after taking into account the separation of the surety business and measured on an IFRS basis. Article content About Travelers The Travelers Companies, Inc. (NYSE: TRV) is a leading provider of property casualty insurance for auto, home and business. A component of the Dow Jones Industrial Average, Travelers has more than 30,000 employees and generated revenues of more than $46 billion in 2024. For more information, visit Article content Forward-Looking Statements All statements in this press release other than statements of historical facts are 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. These include, among others, statements regarding expected closing of the transaction, use of proceeds, financial impact of the sale and share repurchases. Actual results of matters addressed in these forward-looking statements involve risks and uncertainties and may differ substantially from those expressed or implied. Some of the factors that could cause actual results to differ are discussed under the heading 'Risk Factors' and 'Forward-Looking Statements' in the company's most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission. In addition, the transaction is subject to closing conditions, including obtaining required regulatory approvals and the satisfaction of other customary closing conditions, and may not occur. The forward-looking statements in this press release speak only as of the date of this press release, and we undertake no obligation to update any forward-looking statements. Article content Article content Article content Article content Contacts Article content Article content Article content
