Property and casualty insurer American Financial (NYSE:AFG) agreed to buy Liberty Mutual’s workers compensation business on Thursday for $250 million in cash.
Lakeland, Fla.-based Summit Holdings Southeast provides workers compensation services in the U.S. southeast region, with some $520 million in premiums written.
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It will continue to operate under the Summit brand through American Financial’s Great American Insurance Group. American Financial said it will inject another $400 million in capital investments into the business once the deal closes.
“We value its underwriting discipline, talented management team and value-based service model,” American Financial co-chief Carl Lindner III said in a statement.
Under the terms of the deal, American Financial will pay privately-held Liberty Mutual $250 million at closing. It does not plan to use any external financing to fund the deal.
The transaction is expected to close in the first or second quarter of 2014, subject to customary closing conditions and regulatory approvals.
Shares of American Financial were down 0.19% to $56.63 in recent trade. They have risen about 38% over the last 12 months.