Liberty Buys Safeco
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Each share of Safeco will be exchanged for $68.25 cash, nearly a 51 percent premium over Safeco's closing stock price of $45.23 on Tuesday.
Liberty Mutual is the sixth-largest property and casualty insurer in the United States, based its 2007 direct written premium of $20.2 billion.
Safeco had 2007 direct written premium of $5.9 billion.
"Safeco's operations and product mix complement our existing Agency Markets operations," Liberty Mutual Chairman Edmund Kelly said in a statement.
Safeco would become part of Liberty Mutual's Agency Markets business unit.
Combined, the organization would have about 15,000 independent agencies.