Safeco sells life unit at a loss to focus on P/C.Seattle-based Safeco Corp. has agreed to sell its life and investment operations for $1.35 billion to a group of investors led by White Mountains Insurance Group White Mountains Insurance Group is a holding company with business interests in property and casualty insurance, and reinsurance. The group owns the direct marketing insurer Esurance. External links
The sale by Safeco includes Safeco Life & Investments' life insurance, group insurance, annuities and mutual fund businesses, and could include additional proceeds above the sale price based on June 30 statutory book value, Safeco said in a statement. Safeco will see an after-tax loss of about $200 million on the sale of the life operations, or about $1.50 a share, subject to adjustments at closing, Christine Mead mead (mēd), wine made of fermented honey and water, sometimes flavored with spices. It is highly intoxicating. Mead was known in classical Greece and Rome and was the favorite drink of the tribes of N and W Europe. , chief financial officer for Safeco Corp. said during a conference call. "We looked at multiple scenarios for disposition of the business, including separation into component parts as well as sale of the whole in one transaction, and in the end believe this transaction represents the best value for our shareholders, contributors, customers and our employees," Mike McGavick Michael S. "Mike" McGavick (born February 7, 1958 in Seattle, Washington) is a former American business executive and a graduate of the University of Washington. McGavick was a Republican candidate for the US Senate seat held by Maria Cantwell in the 2006 election, but , Safeco chairman and chief executive officer, said during the conference call. A newly formed acquisition company will be capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. with equity of some $1 billion, with White Mountains White Mountains, part of the Appalachian system, N N.H. and SW Maine, rising to 6,288 ft (1,917 m) at Mt. Washington in the Presidential Range and to 5,249 ft (1,600 m) at Mt. Lafayette in the Franconia Mountains. Crawford Notch separates these two main groups. and Berkshire Hathaway each investing $200 million, White Mountains said in a statement. The acquisition company also has secured committed bank financing of up to $350 million, White Mountains said. White Mountains and Berkshire Hathaway will each own approximately 24% of the company, White Mountains said. Safeco Life Snapshot Total Premiums, 1998-2002 ($ Thousands) 1998 $1,737,674 1999 $1,090,966 2000 $1,928,781 2001 $1,575,175 2002 $1,851,197 Sources: A.M. Best Co. Data, Company data, Yahoo Finance |
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