NU Online News Service, July 1, 12:09 p.m. EDT
Worcester, Mass.-based insurer The Hanover Insurance Group, Inc. says it has completed its acquisition of Chaucer Holdings PLC, a major specialist Lloyd's insurance group.
Hanover paid approximately $474 million for Chaucer, including approximately $13 million to be paid in loan notes to shareholders who have elected to receive the notes instead of cash.
“The combination of our companies represents an important milestone in our journey to build a world class property and casualty organization and to significantly enhance our specialty strategy,” says Frederick H. Eppinger, chief executive officer at The Hanover in a statement. “We fully expect this acquisition to be accretive to our earnings, while providing our company with greater scale, more geographic diversification, an expanded market presence, and additional underwriting and risk management expertise.”
In an interview with NU Online News Service, Eppinger called the deal more strategic than opportunistic.
Robert Stuchbery, who will continue as CEO of Chaucer, said the transaction would strengthen the company's financial position and set the stage for continued growth.
The transaction is expected to be neutral to modestly beneficial to Hanover's earnings in 2011, and have a more meaningful impact on earnings and return on equity in 2012.
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