Travelers to acquire The Dominion

Travelers will purchase the Canadian insurer for $1.1 billion

The Travelers Companies, Inc. has announced it is acquiring The Dominion of Canada General Insurance Company from E-L Financial Corporation Limited for approximately $1.1 billion in cash.

The Dominion and Travelers’ Canadian operations will be integrated and the combined organization will remain headquartered in Toronto, according to a Travelers’ press release.

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“This transaction is consistent with our strategy to make thoughtful investments in attractive markets outside the United States,” said Jay Fishman, chairman and chief executive officer of Travelers, in a statement. “The Dominion is a great franchise, and this is a very good opportunity for Travelers to significantly improve its market position and scale in a meaningful market. We expect that the transaction will have no significant impact on 2013 earnings per share and will be slightly accretive to 2014 earnings per share.”

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“The Dominion’s extensive distribution network and established customer base provide us with an exceptional platform for expanding our commercial lines business and generally strengthening our presence in Canada,” said Alan Schnitzer, vice-chairman and head of Travelers’ Financial, Professional & International Insurance business segment. “The combined business will benefit from Travelers’ sophistication in the use of data and analytics as well as claim and risk control capabilities. We look forward to welcoming The Dominion’s talented employees and management team to Travelers.”

Brigid Murphy, president and chief executive officer of The Dominion, will continue in these roles at the combined organization. George Petropoulos, president and chief executive officer of Travelers Canada, will help Murphy lead the new organization as vice-chairman. In addition, Petropoulos will be executive vice-president, Bond and Financial Products.

“This is the perfect match for The Dominion,” said Murphy. “Travelers is a recognized leader in the insurance industry with a well-deserved reputation for excellence. We are looking forward to working with the Travelers Canada team as we begin this exciting new chapter, while continuing our commitment to the communities and organizations we serve.”

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“The combination will substantially enhance Travelers’ product breadth in Canada by coupling The Dominion’s commercial and personal portfolios with Travelers Canada’s surety, management liability and commercial middle market products,” said Petropoulos. “We plan to leverage the expertise of both companies, and we will work closely with The Dominion team to assure a smooth transition for employees, customers and brokers.”

The transaction is expected to close in the fourth quarter of 2013, subject to regulatory approvals and other customary closing conditions. Travelers will fund the transaction, subject to market conditions, through a combination of debt and/or preferred stock financing and internal resources. The company does not believe that the transaction will have a significant impact on anticipated share repurchases for 2013 or 2014.

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