Canadian travel company Travelers agrees to offload certain operations to Defenity in a deal valued at approximately US$2.4 billion.
The Travelers Companies (NYSE:TRV) has agreed to offload its Canadian personal insurance and the bulk of its commercial insurance business to Definity Financial (TSX:DFY:CA) for $2.4 billion, the firm announced Tuesday.
Travelers, the leading surety writer in the U.S., will keep its Canadian surety business after the sale. The deal positions Definity as Canada's fourth-largest property and casualty insurer. It is slated to increase Definity's personal lines annual premiums by approximately $1 billion and boost its operating earnings per share.
The acquisition price equates to 1.8 times book value, with around $0.8 billion of excess local capital earmarked for tax-efficient repatriation. The transaction remains subject to regulatory approvals, with a projected closing date in Q1 2026.
This venture reflects Travelers' strategy of strategic capital allocation and long-term value generation. Definity plans to bolster its growth and competitiveness in Canada with the acquisition. The deal aims to create synergies and expand the reach of both companies.
The insurance industry witnesses the purchase of Travelers' Canadian personal and commercial insurance business by Definity Financial, marking a significant move in the finance sector. With the acquisition, Definity aims to enhance its business growth and competitiveness in the Canadian market, strategicly creating synergies and widening their reach simultaneously.
