Ohio Casualty (NASDAQ:OCAS)
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Liberty Mutual Group (“Liberty Mutual”)
and Ohio Casualty Corporation (“Ohio Casualty”)
(NASD: OCAS) today announced that they have entered into a definitive
agreement pursuant to which Liberty Mutual will acquire all outstanding
shares of common stock of Ohio Casualty for $44.00 per share in cash.
Ohio Casualty Corporation is the holding company of The Ohio Casualty
Insurance Company and five other property and casualty insurance
companies, which are referred to under the marketing brand Ohio Casualty
Group. Ohio Casualty Group ranks 50th among
property and casualty insurers based upon net premiums written (Best’s
Review, July 2006), and sells personal, commercial and bond insurance
products through independent agents and brokers.
The transaction is valued at approximately $2.7 billion. Liberty Mutual
intends to fund the purchase with cash on hand and short-term debt; the
transaction is not subject to any financing contingencies. The proposed
transaction, which has been approved by the Boards of Directors of both
companies, is subject to approval by Ohio Casualty shareholders and
customary regulatory approvals and conditions, and is expected to close
in the third quarter of 2007.
Following the acquisition, Ohio Casualty will be part of Liberty Mutual
Group’s Agency Markets business unit. The 11
companies in Liberty Mutual Agency Markets have more than 6,800
employees and approximately 6,500 appointed agencies. In 2006, Liberty
Mutual Agency Markets’ net written premium was
$5.9 billion. Ohio Casualty, which has approximately 2,100 employees and
operations in 48 states, has approximately 3,400 appointed agencies. In
2006, Ohio Casualty’s net written premium was
$1.4 billion.
“Under Dan Carmichael’s
leadership, Ohio Casualty has been transformed into a premier regional
property and casualty company and is a great fit with our Agency Markets
business,” said Edmund F. Kelly, Liberty
Mutual Group chairman, president and chief executive officer. “Through
the addition of Ohio Casualty, our regional-company independent agency
business is significantly stronger and our agency relationships are
strengthened. With combined net written premium exceeding $7.3 billion
following this transaction, we will become the largest regional provider
of property and casualty products distributed through independent agents
in the United States.”
Dan Carmichael, president and chief executive of Ohio Casualty, said, “I
am very proud of the accomplishments of our employees, agents and
management at Ohio Casualty in creating a leading super-regional
property and casualty insurance company. We look forward to being an
important component of Liberty Mutual Agency Markets’
continuing success. We believe this transaction will benefit our key
constituents and enable our shareholders to realize significant value
for their investment in Ohio Casualty.”
Gary Gregg, president of Liberty Mutual Agency Markets, said, “I
look forward to working with Dan and the leadership of Ohio Casualty,
who will play a key role in the joint integration team tasked with
combining the best of both organizations to create a stronger Liberty
Mutual Agency Markets. We share Ohio Casualty’s
commitment to employees, customers and agents. The combined organization
intends to maintain a significant presence in the Cincinnati area and
will continue to support local charities in the communities in which we
do business.”
About Liberty Mutual Group
Boston-based Liberty Mutual Group is a diversified global insurer and
sixth largest property and casualty insurer in the United States based
on 2005 direct written premium. The Company also ranks 95th
on the Fortune 500 list of largest corporations in the United States
based on 2006 revenue of $23.5 billion. As of December 31, 2006, Liberty
Mutual Group had $85.5 billion in consolidated assets.
Liberty Mutual Group offers a wide range of insurance products and
services, including personal automobile, homeowners, commercial multiple
peril, commercial automobile, general liability, workers compensation,
global specialty, group disability, assumed reinsurance, fire and surety.
Liberty Mutual Group (www.libertymutual.com)
employs over 39,000 people in more than 900 offices throughout the world.
About Ohio Casualty Corporation
Ohio Casualty Corporation is the holding company of The Ohio Casualty
Insurance Company and five other subsidiary insurance companies.
Headquartered in Fairfield, OH, Ohio Casualty Corporation trades on the
NASDAQ Stock Market under the symbol OCAS. With approximately 2,100
employees in five major locations countrywide, Ohio Casualty Group is
ranked among the top 50 U.S. property/casualty insurance groups based on
net premiums written (Best’s Review, July
2006).
Ohio Casualty Group is the marketing brand for our six property/casualty
insurance companies, which are licensed to write auto, home and business
insurance. Policies are written through the independent agency system.
The oldest company, The Ohio Casualty Insurance Company, was founded in
1919.
Rated A (Excellent) for financial strength by the A.M. Best Company,
Inc., the Group has written premiums of approximately $1.42 billion as
of Dec. 31, 2006. OCG products are marketed through approximately 3,400
independent agencies. Policies may be underwritten by The Ohio Casualty
Insurance Company, West American Insurance Company, American Fire and
Casualty Company, Ohio Security Insurance Company, Avomark Insurance
Company or Ohio Casualty of New Jersey, Inc.
Cautionary Notice Regarding Forward Looking Statements
Certain statements in this press release contain forward-looking
statements, including statements relating to results of operations.
These forward-looking statements are based on current expectations,
estimates, forecasts and projections of future company or industry
performance based on management's judgment, beliefs, current trends and
market conditions. Actual outcomes and results may differ materially
from what is expressed, forecasted or implied in any forward-looking
statement. Forward-looking statements made by Ohio Casualty or Liberty
Mutual may be identified by the use of words such as "will," "expects,"
"intends," "plans," “anticipates,"
"believes," "seeks," "estimates," and similar expressions. There are a
number of risks and uncertainties that could cause actual results to
differ materially from the forward-looking statements included in this
document. For example, (1) Ohio Casualty may be unable to obtain
shareholder approval required for the transaction; (2) regulatory
approvals required for the transaction may not be obtained, or required
regulatory approvals may delay the transaction or result in the
imposition of conditions that could have a material adverse effect on
Ohio Casualty or Liberty Mutual or cause the parties to abandon the
transaction; (3) conditions to the closing of the transaction may not be
satisfied; (4) the business of Ohio Casualty or Liberty Mutual may
suffer as a result of uncertainty surrounding the transaction; and (5)
Ohio Casualty or Liberty Mutual may be adversely affected by other
economic, business, and/or competitive factors. These and other factors
that could cause Ohio Casualty’s actual
results to differ materially from those expressed or implied are
discussed under "Risk Factors" in Ohio Casualty’s
most recent annual report on Form 10-K and other filings with the
Securities and Exchange Commission. For a further discussion of these
and other risks and uncertainties affecting Liberty Mutual, see Liberty
Mutual’s website at www.libertymutual.com/investors.
Ohio Casualty and Liberty Mutual undertake no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise. Readers are cautioned not to place undue
reliance on these forward-looking statements.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in respect
of the proposed transaction. In connection with the proposed
transaction, a proxy statement of Ohio Casualty and other materials will
be filed with the SEC. WE URGE INVESTORS TO READ THE PROXY STATEMENT AND
THESE OTHER MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT OHIO CASUALTY CORPORATION AND
THE PROPOSED TRANSACTION. Investors will be able to obtain free copies
of the proxy statement (when available) as well as other filed documents
containing information about Ohio Casualty on the SEC’s
website at http://www.sec.gov. Free
copies of Ohio Casualty’s SEC filings are
also available from Ohio Casualty Corporation, 9450 Seward Road,
Fairfield, Ohio 45014, Attention: Investor Relations.
Participants in the Solicitation
Ohio Casualty and its executive officers, directors, other members of
management, employees and Liberty Mutual may be deemed, under SEC rules,
to be participants in the solicitation of proxies from Ohio Casualty’s
shareholders with respect to the proposed transaction. Information
regarding the executive officers and directors of Ohio Casualty is set
forth in its definitive proxy statement for its 2007 annual meeting
filed with the SEC on April 4, 2007. More detailed information regarding
the identity of potential participants, and their direct or indirect
interests, by securities holdings or otherwise, will be set forth in the
proxy statement and other materials to be filed with the SEC in
connection with the proposed transaction.