OneBeacon Insurance Group is one of the largest financial firms in Minnesota, and they have agreed to be sold to Intact Financial Corp, a Canadian insurance company for a staggering $1.7 billion dollars. This combination has resulted in the formation of a specialty insurance company with over $1.5 billion in annual premiums, and represents a substantial increase in colonization into the United States by the Canadian company.
It was agreed upon that Intact would pay $18.10 per OneBeacon share, which works out to be a 15 percent premium over OneBeacon’s recent market value. As of this morning, OneBeacon’s shares were up 17 percent to $18.29. Separately, the Plymouth-based company said it earned $32.1 million, or 34 cents a share, in the first quarter of the year. That’s down from $46.4 million a year ago. Adjusted for one-time gains, the company’s latest profit amounted to 24 cents a share. Revenue was $292.4 million, up from $278.6 million a year ago.
OneBeacon chief executive Mike Miller said about the massive deal that both companies are looking forward to a profitable future in their specialty portfolio in the years ahead. The chief executive of Intact, Charles Brindamour, says that the acquisition of OneBeacon is a good strategic fit because of their expertise in commercial and specialty lines of insurance.
OneBeacon, based in Plymouth, was formed in 2001 when White Mountains Insurance Group acquired the former CGU’s U.S. property-casualty business from Aviva PLC. White Mountains, which is based in Hanover, N.H., agreed to vote for the deal to sell OneBeacon to Intact. The deal is expected to close in the fourth quarter and OneBeacon is expecting to continue paying regular dividends until the deal is complete.
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