Workers’ comp insurer Zenith to be sold to Toronto firm Fairfax
California’s second-largest workers’ compensation insurance company, Zenith National Insurance Co. of Woodland Hills, has agreed to be acquired by its biggest shareholder for nearly $1.3 billion in cash.
Fairfax Financial Holdings in Toronto, which owns 8.2% of Zenith, will pay $38 a share for the stock it doesn’t already own. The deal values Zenith at $1.4 billion.
Zenith, which sells policies to protect employers and employees from workplace accidents and injuries, will continue to operate as a wholly owned subsidiary of Fairfax. The transaction is expected to close by June 30.
Zenith’s current management under Chief Executive Stanley Zax will continue to run the company and no changes in the operating philosophy are planned, Fairfax said.
Fairfax plans to fund the acquisition with cash and proceeds from a planned $200-million stock offering.
The deal must be approved by Zenith shareholders and the California Department of Insurance.
