Farmers Group, Inc. signed a definitive agreement to acquire Metropolitan Property And Casualty Insurance Company from MetLife, Inc. (NYSE:MET) for $3.9 billion on December 11, 2020. The acquisition will cover entities, Economy Fire & Casualty Company, Economy Premier Assurance Company, Economy Preferred Insurance Company, Metropolitan Casualty Insurance Company, Metropolitan Direct Property and Casualty Insurance Company, Metropolitan Group Property and Casualty Insurance Company, Metropolitan Lloyds Insurance Company of Texas and MetLife Auto & Home Insurance Agency, Inc. The consideration will be paid in cash and is subject to certain adjustments. Zurich Insurance Group Ltd. will contribute $2.43 billion to the deal through its Farmers Group Inc. unit, while Farmers Exchanges will contribute $1.51 billion. Under the terms of the transaction, Farmers Group will acquire Metropolitan Property and Casualty Insurance Company and certain wholly owned subsidiaries of MetLife. In a related transaction, Farmers Exchanges agreed to acquire the U.S. P&C business less certain assets and liabilities from Farmers Group, Inc. for $1.5 billion on December 11, 2020. Zurich Insurance Group Ltd. provided an internal loan to Farmers Group, Inc. to fund the transaction that was funded from its internal resources and external issuance of hybrid debt. U.S. property and casualty business had net income of $245 million in 2019. The transaction is subject to customary closing conditions, including regulatory approvals and is expected to close in the second quarter of 2021. The acquisition is expected to contribute to the earnings of Zurich Insurance Group Ltd. from the first full year after completion and is expected to deliver Zurich a return on investment of approximately 10% from 2023. ROE and EPS are expected to be accretive to Zurich Insurance Group Ltd. from first full year of transaction. Rothschild & Co US Inc. acted as financial advisor and Nicholas Potter, Drew Dutton, Eugene Benger, Jonathan Lewis, Peter Schuur, Daniel Priest, Judith Church and Nicole Mesard of Debevoise & Plimpton LLP served as legal counsel to MetLife. Morgan Stanley and Citigroup acted as financial advisors to Zurich Insurance Group Ltd. and Farmers Exchange. Thomas Cerabino, Sarah Wong, Elizabeth Bannigan, Matthew Makover, Guy Inbar and Yevgeniy Markov of Willkie Farr & Gallagher LLP acted as legal counsel to Zurich and Farmers Group, Inc. in the transaction. Sean M. Carney of Sidley Austin LLP acted as legal advisor to Farmers Group.