Allstate Buys Esurance, Answer Financial for $1 Billion
May 18th 2011 10:50AM
Updated May 20th 2011 11:26AM
Home and auto insurer Allstate (ALL) is buying Esurance and Answer Financial from White Mountains Insurance (WTM) for about $1 billion.
Allstate Corp. says the deal will help it tap consumers who prefer certain brands along with consumers who want choices among insurance carriers.
White Mountains Insurance Group Ltd., based in Hanover, N.H., says the sale will increase its book value by $80 per share.
Esurance sells auto insurance directly to customers online and through call centers. Answer Financial is an independent personal insurance agency.
Allstate, based in Northbrook, Ill., has agreed to pay $700 million plus the tangible net value of businesses being acquired. It estimates the total price would be about $1 billion.
White Mountains shares rose $40.31, or 11.7%, to $383.94 in morning trading Wednesday. Allstate shares slipped 11 cents to $32.31.