Filed by: Travelers Property Casualty Corp. pursuant to
Rule 425 of the Securities Act of 1933 and deemed filed
pursuant to Rule 14a-12 of the Securities Exchange Act
of 1934
Subject Company: Travelers Property Casualty Corp.
Commission File No.: 1-31266
The following joint press release was issued by Travelers Property
Casualty Corp. and The St. Paul Companies, Inc. on November 17, 2003:
[THE ST. PAUL LOGO] [TRAVELERS LOGO]
FOR IMMEDIATE RELEASE
THE ST. PAUL COMPANIES AND TRAVELERS PROPERTY CASUALTY
TO MERGE, CREATING SECOND LARGEST COMMERCIAL INSURER
COMBINED COMPANY WILL BE A LEADING PROVIDER OF COMMERCIAL AND PERSONAL PROPERTY
CASUALTY INSURANCE DISTRIBUTED THROUGH INDEPENDENT AGENTS AND BROKERS
MERGER OF EQUALS ENHANCES GROWTH OPPORTUNITIES
COMBINED COMPANY WILL HAVE TOTAL SHAREHOLDERS' EQUITY OF $20 BILLION
SAINT PAUL, MINN. AND HARTFORD, CONN. (NOVEMBER 17, 2003) - The St. Paul
Companies, Inc. (NYSE: SPC) and Travelers Property Casualty Corp. (NYSE: TAP.A
and TAP.B) today announced that they have signed a definitive merger agreement
that will create the nation's second largest commercial insurer, to be known as
The St. Paul Travelers Companies. The combined company will be a leading
provider of property casualty insurance products distributed through independent
agents and brokers and one of the largest financial services companies in the
United States. It is expected to have total assets of $107 billion,
shareholders' equity of $20 billion, total capital of $26 billion and net
written premiums of $20 billion. With unparalleled product breadth and
geographic reach, the combined entity will be uniquely positioned as the
property casualty insurer of choice for agents, brokers and customers across the
United States.
The Board of Directors of each company has unanimously agreed to the tax-free,
stock-for-stock merger. Under the terms of the merger agreement, holders of
Travelers Class A and Class B common stock will each receive 0.4334 St. Paul
common shares for each Travelers share. The combined company is expected to pay
dividends at the annual rate of $0.88 per share. In addition, The St. Paul
expects to pay a special dividend to its shareholders prior to the closing, so
that in 2004, shareholders of The St. Paul will receive dividends amounting to
The St. Paul's current indicated annual rate of $1.16 per share. The transaction
is subject to customary closing conditions, including the approval by the
shareholders of both companies as well as certain regulatory approvals. The
transaction is expected to close in the second quarter of 2004.
The St. Paul Travelers Companies will remain a Minnesota corporation and will
have its corporate headquarters in Saint Paul, Minnesota. The specialty
insurance lines, which will be known as St. Paul Specialty, will be based in
Saint Paul. The St. Paul's international business will continue to be based in
London. The combined company's commercial lines and personal lines business will
be consolidated under the Travelers brand and based in Hartford, Connecticut.
The company will also continue to own The St. Paul's nearly 80 percent interest
in Nuveen Investments, an asset management company serving affluent and high net
worth investors.
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Jay S. Fishman, 51, chairman and chief executive officer of The St. Paul, will
serve as chief executive officer of the combined company, reporting to the new
Board of Directors. Robert I. Lipp, 65, chairman and chief executive officer of
Travelers, will serve as the company's executive chairman until January 1, 2006,
at which time it is anticipated that Mr. Fishman will become chairman as well as
chief executive officer. The new Board of Directors will consist of all current
outside directors of both companies as well as Mr. Lipp and Mr. Fishman,
resulting in a total of 12 directors from Travelers and 11 from The St. Paul.
Mr. Fishman said, "This transaction represents a unique and compelling
opportunity to create one of the nation's largest and strongest property and
casualty insurers, with enhanced prospects for strong and consistent earnings
growth. At a time of industry consolidation, we are putting together two
outstanding companies with excellent brands and reputations, and similar
operating discipline and underwriting skills, to create a significantly larger
and more diversified enterprise with a greater ability to assume and manage
risk.
"From a financial standpoint," Mr. Fishman continued, "I expect the transaction
to enhance growth opportunities and enable the combined company to benefit from
improved efficiencies and economies of scale."
Mr. Lipp said, "We are very excited about the combination of these two
financially strong industry leaders. This transaction brings together two
companies with similar performance-based cultures and highly complementary
product offerings and geographic reach. With efficient operations, a sound
balance sheet, superior technology and a strong national distribution network,
the combined company will be well positioned for the long-term in an environment
that favors stability and strength."
The combined company will have a leading position in national accounts, which is
a traditional strength of Travelers, and in the highly attractive middle market
and small commercial agency businesses. The combination will also benefit from
The St. Paul's expertise and focus in specialty lines. The company will rank #2
in domestic commercial lines, #2 in agent distributed personal lines, #5 overall
among domestic property and casualty companies, and will be one of the top three
commercial insurers in 42 states and the District of Columbia, according to
direct written premium data compiled by AM Best.
Mr. Lipp continued, "Jay and I look forward to working very closely with the
seasoned and talented management teams at The St. Paul and Travelers, to see
that the combined company achieves its full potential. I am particularly eager
to collaborate with Jay on strategic issues once the companies are combined, as
we map out a long-term strategy to further solidify the company's position as a
leading agency-based insurer."
The companies also announced today that Charles J. Clarke, president of
Travelers, will become vice chairman of The St. Paul Travelers Companies.
Douglas G. Elliot, currently chief operating officer of Travelers, will become
chief executive officer of the combined general commercial and personal lines
businesses. T. Michael Miller, executive vice president and chief executive
officer of Specialty Commercial at The St. Paul, will become chief executive
officer of the combined specialty insurance operations. Marita Zuraitis, chief
executive officer of The St. Paul's commercial insurance operations, will become
executive vice president of the combined company, initially focused on the
integration process. She will also work with Mr. Fishman on operational
strategy. Brian MacLean, executive vice president of claim at Travelers and
Timothy M. Yessman, chief executive officer of claim at The St. Paul, will both
become executive vice presidents in the combined claim operation. John A.
MacColl, currently vice chairman of The St. Paul, will continue as a vice
chairman of the combined company.
As a result of the combination, The St. Paul Travelers Companies, its
shareholders, employees, agents, and customers should benefit from its:
- Considerable financial strength.
- Depth and breadth of product offerings.
- Strong distribution presence with enhanced geographic coverage across the
U.S.
- Experienced and well-regarded management team.
- Successful track record in integrating businesses.
- Enhanced growth opportunities, with greater diversity and stability of
earnings.
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- Greater efficiencies and economies of scale.
STRONG COMMITMENTS TO SAINT PAUL AND HARTFORD
"We are committed to maintaining a strong presence in both Saint Paul and
Hartford, where the two companies have long played meaningful financial, civic
and philanthropic roles in their respective home cities," Mr. Fishman and Mr.
Lipp said. "We are confident that this transaction will yield tangible benefits
to both communities. Saint Paul will serve as the corporate headquarters of our
significantly larger and stronger financial services company and also will be
home to our specialty lines business. At the same time, Hartford will be the
base of operations for our commercial lines and personal lines businesses."
Travelers was advised by Citigroup Global Markets and Lehman Brothers. Simpson
Thacher & Bartlett LLP acted as Travelers' legal counsel. The St. Paul was
advised in the transaction by Goldman Sachs and Merrill Lynch. Davis Polk &
Wardwell acted as legal counsel for The St. Paul.
# # #
WEBCAST: http://travelers.com/investor or http://stpaul.com
The managements of The St. Paul and Travelers will discuss the proposed merger
via webcast at 9 a.m. (EDT) today. Following the live event, an audio playback
of the webcast will be available and the slide presentation will be archived at
the web sites noted above. To listen to the webcast or the playback, click on
one of the links above.
ABOUT THE ST. PAUL COMPANIES
The St. Paul Companies is headquartered in Saint Paul, Minnesota, and provides
commercial property-liability insurance and asset management services. The St.
Paul reported 2002 revenue from continuing operations of $8.92 billion and total
assets of $39.96 billion, and ranks No. 207 on the 2002 Fortune 500 list of
largest U.S. companies. For additional information about The St. Paul's
quarterly results, go to the Investor Relations section of The St. Paul's web
site: www.stpaul.com.
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ABOUT TRAVELERS PROPERTY CASUALTY CORP.
Travelers Property Casualty Corp. (NYSE: TAP.A. and TAP.B) is a leading provider
of a wide range of insurance products. The Company is the second largest writer
of homeowners and auto insurance through independent agents. Travelers is the
third largest commercial lines insurer, providing a broad range of insurance
products including workers' compensation, integrated disability, property,
liability, specialty lines, surety bonds, inland/ocean marine, and boiler and
machinery. For more information on Travelers products, see www.travelers.com.
CONTACTS:
FOR THE ST. PAUL COMPANIES
Media: Shane Boyd
651.310.3846
shane.boyd@stpaul.com
Investors: Laura Gagnon
651.310.7696
laura.gagnon@stpaul.com
FOR TRAVELERS PROPERTY CASUALTY CORP.
Media: Keith Anderson
860.954.6390
Institutional Investors: Maria Olivo
860.277.8330
Individual Investors: Marc Parr
860.277.0779
This release contains certain forward-looking information about Travelers
Property Casualty Corp. ("Travelers"), The St. Paul Companies, Inc. ("The St.
Paul") and the combined company after completion of the transactions that are
intended to be covered by the safe harbor for "forward-looking statements"
provided by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are statements that are not historical facts. Words
such as "expect", "feel", "believe", "will", "may", "anticipate", "plan",
"estimate", "intend", "should" and similar expressions are intended to identify
forward-looking statements. These statements include, but are not limited to,
financial projections and estimates and their underlying assumptions; statements
regarding plans, objectives and expectations with respect to future operations,
products and services; and statements regarding future performance. Such
statements are subject to certain risks and uncertainties, many of which are
difficult to predict and generally beyond the control of Travelers and The St.
Paul, that could cause actual results to differ materially from those expressed
in, or implied or projected by, the forward-looking information and statements.
Some other risks and uncertainties include, but are not limited to: those
discussed and identified in public filings with the Securities and Exchange
Commission (the "SEC") made by Travelers and The St. Paul; the inability to
obtain price increases due to competition or otherwise; losses due to foreign
currency exchange rate fluctuations and losses in investment portfolios, which
could be adversely impacted by adverse developments in U.S. and global financial
markets, interest rates and rates of inflation; weakening U.S. and global
economic conditions; insufficiency
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of, or changes in, loss reserves; the occurrence of catastrophic events, both
natural and man-made, including terrorist acts, with a severity or frequency
exceeding our expectations; exposure to, and adverse developments involving,
environmental claims and related litigation; the impact of claims related to
exposure to potentially harmful products or substances, including, but not
limited to, lead paint, silica and other potentially harmful substances; adverse
changes in loss cost trends, including inflationary pressures in medical costs
and auto and home repair costs; developments relating to coverage and liability
for mold claims; the effects of corporate bankruptcies on surety bond claims;
adverse developments in the cost, availability and/or ability to collect
reinsurance; the ability of our subsidiaries to pay dividends to us; adverse
outcomes in legal proceedings; judicial expansion of policy coverage and the
impact of new theories of liability; the impact of legislative actions,
including federal and state legislation related to asbestos liability reform;
larger than expected assessments for guaranty funds and mandatory pooling
arrangements; a downgrade in claims-paying and financial strength ratings; the
loss or significant restriction on the ability to use credit scoring in the
pricing and underwriting of policies; amendments and changes to the risk-based
capital requirements; the ability to achieve the cost savings and synergies
contemplated by the proposed merger; the effect of regulatory conditions, if
any, imposed by regulatory agencies; the reaction of Travelers' and The St.
Paul's customers and policyholders to the transaction; the ability to promptly
and effectively integrate the businesses of Travelers and The St. Paul; and
diversion of management time on merger-related issues.
Readers are cautioned not to place undue reliance on these forward-looking
statements which speak only as of the date hereof. Neither Travelers nor The St.
Paul undertakes any obligation to republish revised forward-looking statements
to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events. Readers are also urged to carefully review
and consider the various disclosures in Travelers' and The St. Paul's various
SEC reports, including but not limited to Annual Reports on Form 10-K for the
year ended December 31, 2002 and Quarterly Reports on Form 10-Q for the
reporting periods of 2003.
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ADDITIONAL INFORMATION
This filing may be deemed to be solicitation material in respect of the
proposed merger of Travelers and The St. Paul. In connection with the proposed
transaction, a registration statement on Form S-4 will be filed with the SEC.
SHAREHOLDERS OF TRAVELERS AND SHAREHOLDERS OF THE ST. PAUL ARE ENCOURAGED TO
READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC, INCLUDING THE JOINT PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE
REGISTRATION STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED MERGER. The final joint proxy statement/prospectus will be mailed
to shareholders of Travelers and shareholders of The St. Paul. Investors and
security holders will be able to obtain the documents free of charge at the
SEC's website, www.sec.gov, from Travelers Property Casualty Corp., One Tower
Square, Hartford, Connecticut 06183, Attention: Investor Relations, or from The
St. Paul Companies, Inc., 385 Washington Street, Saint Paul, Minnesota 55102,
Attention: Investor Relations.
INFORMATION REGARDING PARTICIPANTS
Travelers, The St. Paul and their respective directors and executive
officers and other members of management and employees may be deemed to
participate in the solicitation of proxies in respect of the proposed
transactions. Information regarding Travelers' directors and executive officers
is available in Travelers' proxy statement for its 2003 annual meeting of
shareholders, which was filed with the SEC on March 17, 2003, and information
regarding The St. Paul's directors and executive officers is available in The
St. Paul's proxy statement for its 2003 annual meeting of shareholders, which
was filed on March 28, 2003, as supplemented by the Additional Materials filed
pursuant to Schedule 14A of the Securities Exchange Act of 1934, as amended, on
April 7, 2003. Additional information regarding the interests of such potential
participants will be included in the joint proxy statement/prospectus and the
other relevant documents filed with the SEC when they become available.
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