AIG To Buy Hartford Steam Boiler
HARTFORD, Conn. (AP) _ American International Group Inc. is buying HSB Group Inc. _ parent of specialty insurer Hartford Steam Boiler _ for $1.2 billion in cash and stock, the companies announced Friday.
The deal offers most HSB shareholders $41 per share worth of AIG common stock. Some HSB stockholders will get a mix of AIG stock and cash, AIG said.
The boards of both companies have approved the deal, but it requires approval of HSB stockholders and regulators. The deal is expected to close late this year or early in 2001.
``As part of AIG, Hartford Steam Boiler will be able to take advantage of AIG’s relationships and global network to build its business of specialized insurance and inspection services,″ AIG Chairman M.R. Greenberg said. ``Overseas, AIG should be able to open significant new opportunities for Hartford Steam Boiler.″
HSB spokesman Dennis Milewski said the company would continue to operate out of Hartford, under its own name, and with the current management team.
``The brand name is an important part of what AIG is buying,″ he said.
Hartford Steam Boiler Inspection and Insurance Co. offers specialty insurance, engineering services and consulting to industrial and institutional customers.
Founded amid the Industrial Revolution in 1866, when boiler explosions were a common problem, the company offers loss-prevention guidance, inspection services and insurance against equipment breakdowns.
AIG, one of the largest U.S. insurance companies, is a major commercial and industrial insurer. The New York City-based company also engages in securities brokerage, consumer finance, aircraft leasing and data processing.
Founded in Shanghai in 1919, AIG sells property, life, marine and casualty insurance through hundreds of subsidiaries operating in 130 countries.
Shares of HSB rose $1.312, or 3 percent, to $40 in afternoon trading on the New York Stock Exchange, where shares of AIG fell 56.2 cents to $86.938.