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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest
event reported): July 12, 1999
THE ST. PAUL COMPANIES, INC.
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(Exact name of Registrant as specified in its charter)
Minnesota 0-3021 41-0518860
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(State of (Commission File (I.R.S. Employer
Incorporation) Number) Identification No.)
385 Washington St., St. Paul, MN 55102
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(Address of principal (Zip Code)
executive offices)
(651) 310-7911
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(Registrant's telephone number,
including area code)
N/A
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(Former name or former address, if changed since last
report)
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ITEM 5. Other events.
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The St. Paul Companies, Inc. ("St. Paul") announced on July
12, 1999 that a subsidiary has entered into a Stock and Asset
Purchase Agreement ("Purchase Agreement") with Metropolitan
Property & Casualty Insurance Company (the "Purchaser") relating
to the sale to the Purchaser of substantially all of St. Paul's
standard personal lines of insurance business for proceeds that
are expected to aggregate approximately $600 million. The St.
Paul indicated that the proceeds from the sale, to be paid upon
closing, will be used for general corporate purposes, which may
include strategic acquisitions to augment The St. Paul's existing
specialty insurance and general commercial lines, expansion of
its specialty product offerings, and continuation of The St.
Paul's share repurchase program. In addition to the proceeds to
be paid upon closing, approximately $250 million in capital that
supports the standard personal insurance business will be freed
up as a result of the transaction.
Under the terms of the agreement, the Purchaser will
purchase the Economy Fire & Casualty Group, as well as the other
standard personal insurance operations of The St. Paul. The St.
Paul's standard personal lines operations produced written
premiums of approximately $1.2 billion in 1998, predominantly in
standard auto and homeowners insurance coverages. The
approximately 1,700 St. Paul employees directly involved in the
standard personal insurance business will be transferred to the
Purchaser upon the closing of the transaction.
As a result of the sale, The St. Paul plans to reduce its
expenses consistent with its smaller revenue base. This is
expected to involve the termination of 500-600 employees later
this year. The St. Paul said the transaction is expected to be
modestly accretive to operating earnings in both 1999 and 2000.
In addition, The St. Paul expects to record a modest one-time
gain from the sale, net of charges related to the transaction,
later this year. The amount of the gain will depend upon the
size of the related restructuring charge. The transaction is
subject to state regulatory approvals and other conditions and is
expected to close in the Fall.
Statements made in this Report that are not historical or
current facts are "forward looking statements" made pursuant to
the safe harbor provisions of the federal securities laws.
Forward looking statements represent management's best judgment
as to what may occur in the future, but are subject to certain
risks and uncertainties that could cause actual results and
events to differ materially from those presently anticipated or
projected. These include, but are not limited to risks
regarding: receipt of necessary regulatory approvals and
satisfaction of other conditions to the closing of the
transaction; the effect of the sale on the remaining portion of
The St. Paul's business; the amount of charges associated with
the transaction; the length and financial and operational impact
of the transition period as the business is transferred to the
Purchaser; adjustments affecting the amount of proceeds of the
transaction; and the deployment of the proceeds of sale and the
capital made available as a result of the sale. A further list
of factors affecting The St. Paul's results of operations is
included in its filings with the SEC.
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SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly
authorized.
THE ST. PAUL COMPANIES, INC.
By /s/ Bruce A. Backberg
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Bruce A. Backberg
Senior Vice President - Legal Services
Date: July 13, 1999
