AM Best has commented that the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” for members of The Progressive Corporation (Progressive) (Mayfield Village, OH), along with the Long-Term ICR of “a” for Progressive, the parent holding company, and all Long-Term Issue Credit Ratings (Long-Term IR) on Progressive’s senior and preferred stock issuances remain unchanged following the company’s Feb. 16, 2021, announcement that it has entered into a definitive agreement to acquire Protective Insurance Corporation (Protective), with a total transaction value of approximately $338 million. The acquisition includes all outstanding Class A and Class B common shares of Protective and is expected to close prior to the end of the third quarter of 2021. The outlook of these Credit Ratings (ratings) is stable.
The acquisition, if consummated, will further expand Progressive’s commercial lines products by expanding its footprint to support larger fleets and bring expertise in workers’ compensation coverage for the transportation industry. Upon the completion of the transaction, Protective shareholders will receive $23.30 per share in cash from Progressive. Progressive will fund the purchase through liquid investments on hand. The acquisition is subject to customary closing conditions, including regulatory approvals. AM Best will continue to monitor the transaction through discussions with management and conduct further analysis as the transaction finalizes.
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