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AIG completes acquisition of HSB Group
Following approval from the Connecticut Department of Insurance (DOI) on Nov. 22, 2000, American International Group, Inc. (AIG) announced that it has completed its acquisition of Connecticut-based HSB Group Inc. for $1.2 billion in cash and AIG stock.
After a Nov. 8, 2000, public hearing on the acquisition, the DOI determined that AIG's proposed purchase of HSB would not undermine competition in Connecticut.
HSB's main subsidiary, Hartford Steam Boiler Inspection & Insurance Co., sells commercial boiler and machinery insurance and other property & casualty coverage. Based on premiums written in 1999, the combined companies' market share would be just over 30 percent of the market for boiler and machinery coverage. In the fire insurance market — HSB's other major insurance product — the combined HSB and AIG maintain a 7.9 percent market share.
HSB shareholders approved the transaction on Nov. 6, 2000, and will receive 0.4178 shares of AIG stock in exchange for each share of HSB stock, representing about $41 per AIG share.