Chubb’s recent failed attempt to acquire The Hartford may have gotten a lot of play in the industry and business press, but Chairman and CEO Evan Greenberg said the company explores potential M&A opportunities all the time.
“In light of recent events concerning The Hartford, and for the sake of absolute clarity, I want to reiterate once again our enduring views concerning M&A and capital management,” Greenberg said during the company’s 2021 first-quarter earnings call on April 28. “We look at lots of deals every year – different sizes, small to large, different geographies and product areas – and we pull the trigger infrequently.”
“We have lots of optionality,” Greenberg added.
Greenberg’s comments come after Chubb on March 11 proposed acquiring The Hartford for about $23.2 billion in cash, or $65 per share. The Hartford recently disclosed in its Q1 2021 filings that Chubb came back with two additional offers of $67 and then $70 per share, and its board of directors unanimously rejected each proposal.
Greenberg’s remarks curiously avoided further discussion of the matter. Instead, he appeared to attempt to change the conversation. Greenberg reiterated how Chubb pursues possible acquisitions and looks at opportunities all the time.
Chubb made “17 acquisitions over the past 15 years, and [we] have an excellent track record of advancing the companies’ capabilities while creating shareholder value,” Greenberg said. “Our approach is steady and consistent. We are extremely patient [and] disciplined, and the money is not burning a hole in our pocket.”
Greenberg said that Chubb will pursue an acquisition if it believes a transaction will advance its strategy, further what it is building organically and is good for shareholders.
If all three criteria are met, Chubb “won’t hesitate to pull the trigger,” Greenberg said. “We are highly confident about our future, wealth creation and prospects.”
Greenberg explained that this is how Chubb approached the Hartford.
“This was another opportunity to create additional value and would not distract us from capitalization on organic growth opportunities,” Greenberg said.
M&A ‘Optionality’
Greenberg further addressed an aspect of Chubb’s M&A strategy later in the call, defining what he means when he said the company has lots of “optionality.”
He termed it as a form of opportunity that transcends specific product lines.
“When we’re looking at opportunity, what that means is across product lines, across geographies, across customer segments – and that includes the life insurance business – if we found the right thing and it was accretive to our strategy and it was good for shareholders, we wouldn’t hesitate for a minute,” Greenberg said.