New York-based AIG announced yesterday that it will sell HSB Group, the parent company of Hartford Steam Boiler Inspection and Insurance Company to Munich Re for $742 million in cash.
Hartford Steam Boiler (Hartford, Conn.) is a leading worldwide provider of equipment breakdown and engineered lines insurance and reinsurance. The transaction is expected to close at the end of the first quarter of 2009 and is subject to the satisfaction of certain conditions, including approvals by appropriate regulatory authorities.
"The sale of HSB signals that AIG's restructuring effort is gaining momentum. HSB is a singular business with outstanding performance, and we are pleased to reach agreement with an industry leader in Munich Re," Paula R. Reynolds, Vice Chairman and Chief Restructuring Officer of AIG, said in a press release.
Peter Roder, the Munich Re board member responsible for business in the United States, added that the acquisition is in line with Munich Re's U.S. strategy. "It is another step in developing our position in high return specialized niche segments. This is one of the declared aims of our Changing Gear program for profitable growth," Roder said in a statement.