Liberty pays €100 million for IBRC’s 49% stake

PAMELA NEWENHAM

Boston-based Liberty Mutual Insurance Group is believed to have paid just over

€100 million to acquire the 49 per cent stake in its Irish business that was owned by Irish Bank Resolution Corporation.

The shares in Liberty Insurance, which was formerly Quinn Insurance, were acquired from the special liquidators of IBRC having been held by an entity called Tutelana Ltd, a wholly-owned subsidiary of the former bank.

In November 2011, Liberty Mutual spent €102 million to acquire its 51 per cent stake in the business, with IBRC providing €99 million as part of the recapitalisation.

Under the terms of the original deal, it had the right to buy out IBRC within three to five years but the bank’s liquidation by the State in February accelerated that timeframe.

Liberty Insurance chief executive Patrick O’Brien declined to comment on the purchase price of the IBRC shares but said it represented “fair value” for his US parent.

"There was some speculation at the time of the original deal that we had got this on the cheap but we've had to invest a lot of time and capital into the business to turn it around and it is in a much better position now."

'Small profit'
Mr O'Brien said Liberty's business in Ireland grew by 8 per cent in the first three quarters of this year versus a market decline of 5 per cent.

He expected the company to post a “small profit” this year, having incurred underwriting losses in 2012.

“We’re growing while the market is in declined. We are committed to Ireland for the long term,” he added.

Since taking over the former Quinn business, Liberty has reduced the headcount at the company to about 1,050 from 1,450 previously.

However, there was positive news from it on the employment front yesterday with the announcement that its US parent company is to create 150 new technology jobs in Dublin.

These will be added over the next two years, and will be based at the company's Blanchardstown office.

IT help desk
Liberty said the expanded IT operations in Dublin would support the establishment of an IT help desk, a security operations centre and a software engineering unit.

The jobs represent an expansion of the company’s IT operations, which currently employ over 350 people in Belfast.

Liberty Mutual Insurance chief information officer James McGlennon said the decision to invest in Dublin reflected the quality of IT graduates and experienced professionals available to support future growth.

“Expanding our IT operations in this way strengthens our global software engineering and advanced development capabilities.”

IDA Ireland chief executive Barry O’Leary said Ireland has become a hub for international insurance companies to establish global IT operations here. “Liberty Mutual Insurance Group is a globally recognised name and is a very welcome addition to Ireland’s international financial services sector.”