MAPFRE U.S.A. Corp. to Acquire Safety Insurance Group for $105 Per Share in Cash Deal

Merger Agreement Details and Payment Structure

Under the definitive merger agreement signed on July 23, 2026, Safety Insurance Group will merge with a subsidiary of MAPFRE U.S.A. Corp. Each outstanding share of Safety Insurance Group common stock will be converted into the right to receive $105.00 in cash without interest at the effective time of the merger. Post-merger, Safety Insurance Group will become a wholly-owned direct subsidiary of MAPFRE U.S.A. Corp., with the surviving entity named accordingly.

The $105.00 per share all-cash consideration applies to all outstanding common shares except dissenting shares, company treasury stock, and shares held by MAPFRE U.S.A. Corp., Splash Merger Sub, Inc., or related entities. No interest will be paid on the merger consideration, which will be disbursed by the surviving corporation on the closing date.

Board Approval and Shareholder Endorsement

Safety Insurance Group's board of directors unanimously concluded that the merger and related transactions are fair and advisable for the company and its shareholders. The board approved the merger agreement and resolved to recommend its adoption by the company's stockholders. This unanimous endorsement underscores the board’s confidence that the transaction serves shareholders’ best interests and supports submitting the deal for shareholder vote prior to closing.

Handling of Restricted Stock and Performance Share Awards

All unvested restricted stock awards (RSAs) will fully vest upon closing, with holders receiving cash equal to $105.00 per share multiplied by the number of shares subject to the cancelled awards, payable on the closing date after required withholding. Additionally, holders will be compensated for accrued and unpaid cash dividends from grant date through the effective time, subject to withholding.

Performance share awards (PSAs) will also fully vest at closing, with performance conditions deemed met as specified in the company’s disclosure schedules. PSA holders will receive cash equal to the merger consideration times the applicable shares, plus accrued unpaid dividends, subject to withholding. The surviving corporation and parent will not assume or substitute PSAs.

Interim Business Conduct Covenants

During the period between signing and closing, Safety Insurance Group must operate its business in the ordinary course, preserve key employees, maintain material business relationships, and use commercially reasonable efforts to keep its business intact. The company is restricted from certain actions unless permitted by the merger agreement, law, disclosed schedules, or with prior written consent from Parent, which cannot be unreasonably withheld.

Restrictions on Soliciting Competing Offers

The agreement contains "no-shop" provisions preventing Safety Insurance Group and its agents from soliciting or engaging in discussions about alternative acquisition proposals, sharing information to facilitate competing bids, or entering into agreements related to other transactions. Existing negotiations on alternative deals must be terminated. These provisions protect MAPFRE U.S.A. Corp.'s investment in the transaction.

Regulatory Approvals and Closing Conditions

Completion of the merger requires approval by holders of a majority of voting shares entitled to vote, expiration or termination of Hart-Scott-Rodino antitrust waiting periods, and approval from the Massachusetts Commissioner of Insurance. Additional governmental approvals as specified in the agreement are also necessary. The transaction is contingent on no legal restraints preventing closing.

MAPFRE U.S.A. Corp. and Splash Merger Sub have additional customary closing conditions. Both parties have agreed to cooperate and use reasonable best efforts to fulfill all conditions and obtain regulatory approvals to complete the merger.

Representations, Warranties, and Cooperation

The merger agreement includes standard representations, warranties, and covenants from both parties that establish legal and factual baselines for the transaction. These provisions, subject to disclosure schedules, define obligations during the interim period. Both sides commit to cooperate and use reasonable best efforts to consummate the merger and secure regulatory approvals.

Strategic Importance and Market Impact

MAPFRE U.S.A. Corp.’s acquisition of Safety Insurance Group marks a significant consolidation in the insurance sector. The full integration as a wholly-owned subsidiary reflects MAPFRE’s strategic expansion of its U.S. insurance operations. The $105.00 per share all-cash deal offers shareholders a clear exit and removes uncertainty about the company’s independent future.

Safety Insurance Group’s operations will be absorbed into MAPFRE’s broader insurance network, pending regulatory approvals, including from the Massachusetts Commissioner of Insurance, highlighting the regulatory complexity of the insurance industry.

Closing Process and Shareholder Vote

Following unanimous board approval, Safety Insurance Group shareholders must vote to adopt the merger agreement and approve the transaction. The deal requires majority shareholder approval to close. Afterward, regulatory conditions such as Hart-Scott-Rodino clearance and Massachusetts insurance regulatory approval must be satisfied.

The immediate impact on Safety Insurance Group’s share price was not disclosed at filing. Investors should watch for announcements on the shareholder meeting schedule and regulatory updates as the transaction progresses toward completion.

Employee Equity and Dividend Provisions

Employees holding restricted stock awards and performance share awards will benefit from full acceleration and cash settlement of unvested awards upon closing, ensuring no forfeiture risk. They will also receive payments for accrued and unpaid dividends from grant date to effective time, subject to withholding, compensating them fully for economic benefits lost due to the merger.