UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
October 1, 1997
Date of Report (Date of earliest event reported)
SAFECO CORPORATION
(Exact name of registrant as specified in Charter)
WASHINGTON 1-6563 91-0742146
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
SAFECO Plaza, Seattle, Washington 98185
(Address of principal executive offices) (Zip Code)
(206) 545-5000
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets
On October 1, 1997, SAFECO Corporation, a Washington corporation
("SAFECO"), announced that it had completed its acquisition of American States
Financial Corporation, an Indiana corporation ("ASFC").
On October 1, 1997, ASFC Acquisition Co., an Indiana corporation and a
wholly owned subsidiary of SAFECO ("Merger Sub"), merged with and into ASFC (the
"Merger"), pursuant to the terms of the Agreement and Plan of Merger (the
"Merger Agreement"), dated as of June 6, 1997 by and among SAFECO, Merger Sub,
and ASFC. As a result of the Merger, ASFC is now a wholly owned subsidiary of
SAFECO.
ASFC is an insurance holding company whose insurance subsidiaries are
primarily involved in property and casualty insurance. Prior to its acquisition
by SAFECO it was a public company traded on the New York Stock Exchange.
SAFECO paid $47 in cash for each outstanding share of ASFC common stock,
for a total cash purchase price of approximately $2.8 billion. In connection
with the Merger Agreement, SAFECO also agreed to pay approximately $100 million
to Lincoln National Corporation ("LNC"), an Indiana corporation and former
holder of approximately 83% of the outstanding shares of ASFC common stock, in
consideration for LNC's agreement to release ASFC from certain debt obligations
and agreed to repay a $200 million term loan from LNC.
SAFECO financed the acquisition of ASFC's common stock and the repayment
of obligations to LNC from various sources, including the proceeds from (i)
the issuance of $200 million aggregate principal amount of 10-year senior
notes, (ii) the issuance of $850 million aggregate liquidation amount ($841.5
million net of underwriting compensation) of 40-year, SAFECO-obligated,
mandatorily redeemable preferred securities that are callable after 10-years
("capital securities") by a subsidiary trust, (iii) the issuance of $1.5
billion of commercial paper, and (iv) a $600 million special dividend from
its property and casualty subsidiaries. SAFECO expects to close the sale of
13,000,000 shares of its Common Stock on October 20, 1997 and intends to
apply the proceeds of $595.5 million (net of underwriting commissions) to
retire a like amount of commercial paper in late October 1997. Pending such
uses, the net proceeds will be invested in short-term, investment-grade,
interest-bearing securities. SAFECO, through a subsidiary trust, may issue an
additional $150 million aggregate liquidation amount of capital securities in
the fourth quarter of 1997 to retire an additional amount of commercial paper.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired
The financial statements of ASFC required to be filed are
incorporated by reference. See exhibits 99.2 and 99.3 below.
(b) Pro Forma Financial Information
The required pro forma financial information is incorporated by
reference. See exhibit 99.4 below.
(c) Exhibits
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2.1 Agreement and Plan of Merger dated as of June 6, 1997 by and
among ASFC, SAFECO and ASFC Acquisition Co. (filed as Exhibit 2.1
to SAFECO's report on Form 8-K dated June 6, 1997 and
incorporated by reference).
99.1 Press Release issued by SAFECO on October 1, 1997.
99.2 Consolidated Balance Sheets of ASFC and Subsidiaries as of
December 31, 1996 and 1995, and the related Consolidated
Statements of Income, Shareholders' Equity and Cash Flows for
each of the three years in the period ended December 31, 1996,
together with the notes thereto and the related report of
Independent Accountants (incorporated by reference to pages 34
to 57 of the ASFC Annual Report on Form 10-K for the year
ended December 31, 1996 (Commission File Number 001-11733)).
The Consolidated Balance Sheets and Consolidated Statements of
Income, Shareholders' Equity and Cash Flows on pages 34 to 57
of the ASFC Annual Report on Form 10-K are included in this
Form 8-K as Exhibit 99.2.
99.3 Consolidated Balance Sheets of ASFC and Subsidiaries as of
June 30, 1997 and December 31, 1996, and the related
Consolidated Statements of Income, Shareholders' Equity and
Cash Flows for the Six Months Ended June 30, 1997 and 1996
(unaudited), together with the notes thereto (incorporated by
reference to pages 1 to 10 of the ASFC Quarterly Report on
Form 10-Q for the quarter ended June 30, 1997 (Commission File
Number 001-11733)). The Consolidated Balance Sheets and
Consolidated Statements of Income, Shareholders' Equity and
Cash Flows on pages 1 to 10 of the ASFC Quarterly Report on
Form 10-Q are included in this Form 8-K as Exhibit 99.3.
99.4 Unaudited Pro Forma Combined Condensed Financial Statements of
SAFECO reflecting the acquisition of ASFC and certain related
financings, as of June 30, 1997. Includes Unaudited Pro Forma
Combined Condensed Balance Sheet as of June 30,1997 and Unaudited
Pro Forma Combined Condensed Statements of Income for the Six
Months Ended June 30, 1997 and Year Ended December 31, 1996, and
related notes, incorporated by reference to pages 12 to 17 of
SAFECO's prospectus dated September 15, 1997 contained
in the Registration Statement on Form S-3 dated August 19, 1997
(Registration No. 333-33927). The pro forma financial information
on pages 12 to 17 of the prospectus contained in the
Registration Statement are included in this Form 8-K as Exhibit
99.4.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SAFECO CORPORATION
Dated: October 15, 1997 By: /s/ H. Paul Lowber
---------------------------
H. Paul Lowber
Vice President, Controller and
Chief Accounting Officer
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EXHIBIT INDEX
2.1 Agreement and Plan of Merger dated as of June 6, 1997 by and
among ASFC, SAFECO and ASFC Acquisition Co. (filed as Exhibit 2.1
to SAFECO's report on Form 8-K dated June 6, 1997 and
incorporated by reference).
99.1 Press Release issued by SAFECO on October 1, 1997.
99.2 Consolidated Balance Sheets of ASFC and Subsidiaries as of
December 31, 1996 and 1995, and the related Consolidated
Statements of Income, Shareholders' Equity and Cash Flows for
each of the three years in the period ended December 31, 1996,
together with the notes thereto and the related report of
Independent Accountants (incorporated by reference to pages 34
to 57 of the ASFC Annual Report on Form 10-K for the year
ended December 31, 1996 (Commission File Number 001-11733)).
The Consolidated Balance Sheets and Consolidated Statements of
Income, Shareholders' Equity and Cash Flows on pages 34 to 57
of the ASFC Annual Report on Form 10-K are included in this
Form 8-K as Exhibit 99.2.
99.3 Consolidated Balance Sheets of ASFC and Subsidiaries as of
June 30, 1997 and December 31, 1996, and the related
Consolidated Statements of Income, Shareholders' Equity and
Cash Flows for the Six Months Ended June 30, 1997 and 1996
(unaudited), together with the notes thereto (incorporated by
reference to pages 1 to 10 of the ASFC Quarterly Report on
Form 10-Q for the quarter ended June 30, 1997 (Commission File
Number 001-11733)). The Consolidated Balance Sheets and
Consolidated Statements of Income, Shareholders' Equity and
Cash Flows on pages 1 to 10 of the ASFC Quarterly Report on
Form 10-Q are included in this Form 8-K as Exhibit 99.3.
99.4 Unaudited Pro Forma Combined Condensed Financial Statements of
SAFECO reflecting the acquisition of ASFC and certain related
financings, as of June 30, 1997. Includes Unaudited Pro Forma
Combined Condensed Balance Sheet as of June 30,1997 and Unaudited
Pro Forma Combined Condensed Statements of Income for the Six
Months Ended June 30, 1997 and Year Ended December 31, 1996, and
related notes, incorporated by reference to pages 12 to 17 of
SAFECO's prospectus dated September 15, 1997 contained
in the Registration Statement on Form S-3 dated August 19, 1997
(Registration No. 333-33927). The pro forma financial information
on pages 12 to 17 of the prospectus contained in the
Registration Statement are included in this Form 8-K as Exhibit
99.4.
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