Europe Firm to Buy Fireman’s Fund Insurance

Allianz AG, Europe’s largest insurance company, has signed an agreement to purchase Fireman’s Fund Insurance Co. for $3.3 billion in cash, it was announced today.

Fireman’s Fund Insurance is the principal subsidiary of Greenwich-based Fund American Cos. It had gross premiums in 1989 totaling $3.2 billion.

“This is a perfect match,” Jack Byrne, chairman of both Fireman’s Fund and Fund American, said in a statement.

As part of the total transaction, Allianz will acquire 100% of Fireman’s Fund Insurance stock and Fund American will purchase the common stock portfolio of Fireman’s Fund Insurance for about $2.2 billion in cash.

In addition, when the transaction is closed, Fund American will repurchase all 300,000 shares of convertible preferred stock of Fund American now owned by IFINT SA, a Luxembourg corporation, for $434 million in cash plus unpaid dividends.

The transaction, which is subject to approval by insurance and other regulatory authorities and Fund American stockholders, is expected to be completed early next year.

“We feel we can add value to (Fireman’s Fund Insurance) through our international capabilities, but any advances would come carefully and slowly,” said Wolfgang Muller, a member of the board of management of Allianz AG. “We have been looking for a long time and we have finally found the right fit and the best companion.”

Fireman’s Fund, headquartered in Novato, Calif., was founded in 1863. In 1968, it was acquired by American Express Co., and in 1985 it became an independent company during what was then the largest initial public offering in the history of the New York Stock Exchange.

Allianz, with a worldwide premium value in 1989 of $20 billion, has 223 subsidiaries in 45 countries.