* Deal to add slightly to Travelers' 2014 profit
* Dominion CEO to lead combined operations in Canada
* Deal expected to close in fourth quarter
June 10 U.S. insurer Travelers Co Inc
said it would buy Dominion of Canada General Insurance Co from
E-L Financial Co Ltd 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.
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
Skadden, Arps, Slate, Meagher & Flom LLP and Gowling Lafleur
Henderson LLP were legal advisers to Travelers.