American International Group, Inc. (AIG) agrees to sell its wholly owned subsidiary HSB Group, Inc. (HSB), to the Munich Re Group. HSB, the parent company of The Hartford Steam Boiler Inspection and Insurance Company, is a worldwide provider of equipment breakdown and engineered lines insurance and reinsurance.
Under the terms of the transaction, Munich Re will acquire 100% of the outstanding shares of HSB Group for $742 million in cash and assume $76 million of outstanding HSB capital securities.
The transaction, which is expected to close at the end of the first quarter of 2009, is subject to satisfaction of certain conditions, including approvals by appropriate regulatory authorities.
“Munich Re offers HSB new opportunities to grow our business profitably and expand our offerings in North America and globally,” says Douglas G. Elliot, president and chief executive officer of HSB Group, Inc. “With Munich Re’s outstanding financial strength behind us, we can offer our clients the reassurance that they’re looking for in today’s uncertain market environment” he added.
Elliot and his senior management team will remain with HSB. He will report to Anthony J. Kuczinski, Chief Executive Officer of Munich Re America.
“We extend a warm welcome to the clients and employees of HSB,” says Kuczinski. “HSB has built a tremendous reputation for underwriting highly technical machinery and engineering risks. We believe the strong underwriting culture of HSB and the company’s exceptional client focus makes it an excellent fit for Munich Re. We believe Munich Re’s clients will greatly value the addition of HSB’s products and services.”
D.C.