Travelers Property Casualty's

( TAPA) brief experiment with independence ended Monday as rapid consolidation in the insurance industry forced it into the hands of

St. Paul Cos.

( SPC) at a discount to both its market value and the price at which it went public 20 months ago.

St. Paul will exchange about $16 billion of stock to take control of Travelers, which was sold and spun off by

Citigroup

(C) - Get Report

in March 2002 at $18.50 a share. St. Paul's share exchange values the Hartford insurer at about $15.92 a share, based on Friday's closing price.

Travelers closed Friday at $16.03.

The combined company, St. Paul Travelers, will have total assets of $107 billion, shareholders' equity of $20 billion, total capital of $26 billion and net written premiums of $20 billion. It will be based in Minnesota.

St Paul Chairman and CEO Jay S. Fishman will be chief executive of the combined company, while Travelers' Robert I. Lipp will be chairman until 2006, when Fishman will take over the post.

Monday's deal comes about a month after Canada's

Manulife

(MFC) - Get Report

agreed to buy

John Hancock Financial

( JHF) for about $10 billion in stock. That transaction was recently cleared by the Justice Department.