St. Paul agreed yesterday to buy the Travelers Property & Casualty Corp. for $16.84 billion in stock, creating the second largest commercial property and casualty insurer in the US. The merger, expected to close in the second quarter of 2004, will create a company with $107 billion of assets, $26 billion of capital, and $20 billion of premiums. The largest insurer remains AIG.
The deal comes eighteen months after Travelers was hived off from Citigroup. The combined company will be known as St. Paul Travelers Cos. and be based in St. Paul, Minnesota, where St. Paul is now based. Travelers is based in Hartford, Connecticut.
“I expect the transaction to enhance growth opportunities and enable the combined company to benefit from improved efficiencies and economies of scale,” said Jay Fishman, St. Paul’s chairman and chief executive, in a statement. Fishman, 51, will become chief executive of the combined company.
Robert Lipp, Travelers’ chairman and chief executive, will become executive chairman.