Intact to acquire OneBeacon for US$1.7 billion

Published: May 5, 2017

Updated: July 24, 2018

Author: Luke Jones



Intact Financial Corporation announced this week that it will acquire OneBeacon Insurance Group, Ltd., in a deal that will cost the Canadian company US$1.7 billion.

OneBeacon is a specialty insurance provider based in the United States. Intact, Canada’s largest P&C provider, says it has entered into a definitive agreement for merger pursuant that will allow it to buy the US company.

The acquisition will create “a leading North American specialty lines insurer with over $2 billion in specialty lines premiums.” Intact says the purchase will be complete during the fourth quarter of 2017.

In the all-cash transaction, OneBeacon shareholders will be paid US$18.10 cash per common share, 14% above the normalized share price based on OneBeacon’s closing stock price on the New York Stock Exchange of US$15.89 on May 1.

The acquisition “combines Intact’s leading commercial lines track record and deep data, claims and digital expertise with OneBeacon’s high caliber team and specialty lines capabilities,” Intact suggested. “The acquisition bolsters Intact’s Canadian business with new products and cross-border capabilities, and better positions Intact to compete with international insurers. Furthermore, this provides an additional growth pipeline to leverage Intact’s consolidation expertise in a fragmented specialty lines market.”

Both company board of directors have approved the transaction and now approval from OneBeacon shareholders is being sought.

The transaction has been unanimously approved by the boards of directors of both companies and is subject to approval by OneBeacon’s shareholders.

“Today, we’ve taken an important step in building a world class P&C insurer,” said Charles Brindamour, CEO of Intact Financial Corporation, in the statement. “The addition of OneBeacon is creating a leading North American specialty lines insurer focused on small- to mid-sized businesses. OneBeacon is a strong strategic fit for Intact, with deep expertise in commercial and specialty lines, and shared values. We see significant growth potential from the combination of our specialty lines operations and we look forward to welcoming OneBeacon employees to the Intact family.”

Mike Miller, CEO of OneBeacon Insurance Group, added that they are excited to join Intact. “The opportunity to leverage Intact’s deep technical, financial and technology capabilities makes this combination the perfect next step in the OneBeacon journey. Together, we will accelerate our pursuit in creating a leading specialty insurer in North America. We look forward to working with our U.S. and Canadian independent agents and brokers to deliver market-leading capabilities to our targeted customers. Both companies are dedicated to ensuring a seamless transition and look forward to profitably growing our specialty portfolio going forward.”