Liberty Mutual Launches IPO for Subsidiary
By Sergio | Published September 22, 2010
Liberty Mutual, the Boston-based American insurance group, has submitted to the Securities and Exchange Commission (SEC) an application to take public Liberty Mutual Agency Corp. (LMAC). According to the details in the IPO application form, Liberty Mutual plans to sell over 64 million shares at between US$18 (EUR 13.5) and US$20 (EUR 15) per share.
A group of independent agents and brokers makes up Liberty Mutual Agency, which distribute property, auto, workers’ compensation and casualty insurance products from Liberty Mutual. Liberty Mutual will retain an 80 percent stake in LMAC, whilst shareholders will own the remaining 20 percent.
Analysts overall agree that the IPO move, considered the biggest in 2010, is a positive one for Liberty Mutual, and will bring a windfall of approximately US$1.7 billion (EUR 1.28 billion), which the insurer could use to fund new acquisitions and settle debt, such as the US$130 million (EUR 97.7 million) it paid back in 2007 for the purchase of the insurance company Ohio Casualty.
Business generated by LMAC contributes significantly to Liberty Mutual coffers, and by itself stands as the 10th largest property and casualty insurance company in the United States.
No concrete date for the public offer has been announced, although it is likely to happen as early as this fall, depending also on the approval by the SEC and response of investors.
Insurance Company mentioned:
Liberty Mutual Group offers a wide range of insurance products and services, including personal automobile, homeowners, workers compensation, commercial multiple peril, commercial automobile, general liability, global specialty, group disability, assumed reinsurance, fire, and surety. Liberty Mutual Group employs over 45,000 people in more than 900 offices throughout the world.