American International Group, Inc. (AIG) announced today an agreement 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 leading 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,” said 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,” Mr.
Kuczinski said. “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.”
Paula R. Reynolds, Vice Chairman and Chief Restructuring Officer of AIG,
said: "The sale of HSB signals that AIG's restructuring effort is
gaining momentum. HSB is a singular business with outstanding
performance, and we are pleased to reach agreement with an industry
leader in Munich Re. The transition in ownership should be seamless for
HSB agents, customers and employees.”
“The acquisition of HSB is a perfect fit for our US strategy: It is
another step in developing our position in high return specialized niche
segments. This is one of the declared aims of our Changing Gear program
for profitable growth,” said Peter Röder, Munich Re Board member
responsible for US business.
"This is a very good opportunity for HSB, its clients, and employees,"
said Richard H. Booth, chairman of HSB Group, Inc.
