St. Paul Travelers Cos. Inc. has denied reports of a planned merger with the Swiss insurance company Zurich Financial Services.
The Minnesota insurer issued the denial on Sunday after The Wall Street Journal, citing anonymous sources, reported last Thursday that the company was in the early stages of negotiating a takeover bid for Zurich Financial, one of the largest insurers in Europe.
Zurich Financial has declined to comment on the report. An agreement would face significant obstacles and could take months to complete, the Journal cautioned.
A deal between St. Paul and Zurich Financial could create a company rivaling in size American International Group Inc., the report said.
Zurich Financial has a $33.6 billion stock-market value, and St. Paul Travelers, $29.9 billion. The report said a combination of the two groups could help the companies spread their risks more evenly around the world and would create opportunities to cut costs.
A combination also would generate steadier revenue, it added, because the European and U.S. markets experience boom-and-bust insurance cycles at slightly different times.
St. Paul Travelers said Sunday that it has a policy of avoiding any comment on market rumors or speculation but had issued its statement because of the "factual and definitive manner in which these reports were made, both nationally and internationally."
Zurich Financial Services shares rose sharply Friday after the report, but the stock of St. Paul Travelers declined. St. Paul was trading at $42.04 a share at midday Monday, up 1.18% since Friday's close. Zurich was trading at 315.75 Swiss francs on the Swiss Exchange at midday, down 0.32% for the day.
