Travelers to buy insurer from Canada's E-L Financial for $1.1 bln (updated)
10/06/2013 14:47
* Deal to add slightly to Travelers' 2014 profit * Dominion CEO to lead combined operations in Canada * Deal expected to close in fourth quarter (Adds details, analyst comment; updates stock movement) June 10 (Reuters) - U.S. insurer Travelers Co Inc TRV.N said it would buy Dominion of Canada General Insurance Co from E-L Financial Co Ltd ELF.TO for about $1.1 billion to boost its presence in Canada. Travelers' shares were down marginally at $82.79 in early trade on the New York Stock Exchange. E-L Financial shares rose about 10 percent to C$649.99 - their highest in about six years - on the Toronto Stock Exchange. The deal will add Dominion's commercial and personal insurance portfolios to Travelers' business in Canada. It will help E-L Financial, which operates as an investment and insurance holding company, narrow its focus to life and health insurance, and mutual funds and annuity products that it sells through majority-owned Empire Life Insurance Co. The combined operations will be led by Dominion Chief Executive Brigid Murphy, Travelers said in a statement. ID:nBw3YJq86a Dominion was the biggest contributor to E-L Financial's operating profit in the quarter ended March 31, accounting for more than a third of its operating profit. However, E-L's operating income more than halved during the quarter as Dominion was hit by higher claims for automobile and weather-related property losses. The deal, expected to close in the fourth-quarter, will have no significant impact on Travelers' 2013 earnings, but add slightly to 2014 profit. Travelers, which has a market capitalization of about 31 billion, said it would fund the transaction through debt or preferred stock financing or a combination of both. The company said it does not expect the transaction to have a big impact on its anticipated share repurchases for 2013 or 2014. Skadden, Arps, Slate, Meagher & Flom LLP and Gowling Lafleur Henderson LLP were legal advisers to Travelers. (Reporting by Tanya Agrawal and Anil D'Silva in Bangalore; Editing by Saumyadeb Chakrabarty, Roshni Menon) ((tanya.agrawal@thomsonreuters.com)(within U.S. +1 646 223 8780)(outside U.S. +91 80 6749 1130)(Reuters Messaging: tanya.agrawal.thomsonreuters.com@reuters.net)) Keywords: TRAVELERS DOMINIONCANADA/