As seen on the front page of today’s WSJ:
St. Paul Travelers Cos., of St. Paul, Minn., is discussing the possibility of a merger with Zurich Financial Services of Switzerland, one of Europe’s largest insurers and a bigger company in terms of market capitalization, according to people familiar with the matter. The effort is preliminary and may go nowhere, these people said. A potential deal faces several significant hurdles, and even if successful could take months to complete, they cautioned.[...]
Combined, St. Paul and Zurich Financial could create a rival in size to American International Group Inc., the only U.S. insurer with big international operations. A purchase by St. Paul would be one of the largest European acquisitions ever by a U.S. company. Zurich Financial has a $33.6 billion stock-market value, compared with a stock-market value of $29.9 billion for St. Paul Travelers. Together, the companies racked up more than $90 billion in revenue last year and employed more than 85,000.
(Full disclosure: I’m a former Travelers employee.)
Wow. What a headline to top today’s news.
Preliminary M&A talks are not unusual for most insurance companies. Many of the companies I’m familiar with have groups of people who regularly put out feelers for potential deals. Almost all of those tentative contacts don’t pan out, but once in a while….
It’s not clear from the article where in the discussion process Travelers and Zurich are, so it’s entirely likely that this will fizzle. Normally, you wouldn’t get a leak like this until just before the deal closes (if at all)….but things could be different here.
If it happens…that’s going to be one big insurance company. Many U.S. consumers may be more familiar with one of Zurich’s subsidiaries than Zurich itself — Farmers Insurance.
Dang, that’s going to be a BIG company if the deal goes through.