U.S. Insurance Giant Allstate to Acquire National General for $4 Billion
08 July 2020 - 1:28PM
Dow Jones News
By Ben Otto
U.S. insurance giant Allstate Corp. will acquire National
General Holdings Corp. for about $4 billion in cash, expanding its
reach in the personal property liability business.
Shareholders of National General, a New York-based specialty
personal lines insurance company, will receive a total of $34.50
per share, an offer that comprises $32.00 per share from Allstate
and expected closing dividends of $2.50 per share. The total offer
represents a 69% premium to the stock's last-traded price.
Allstate will fund the deal with $2.2 billion in cash resources
and by issuing $1.5 billion in new senior debt.
National General's board has approved the transaction and the
deal is expected to close in early 2021 subject to regulatory
approvals, the companies said.
The acquisition "accelerates Allstate's strategy to increase
market share in personal property-liability and significantly
expands our independent agent distribution," said Tom Wilson,
Allstate's chief executive officer and chairman. He added that the
deal would be "accretive to adjusted net income earnings per share
and return on equity beginning in the first year."
National General's gross premiums written were $5.6 billion in
2019, which generated $319 million in operating income, the
companies said. The company's stock is down 7.7% this year.
Write to Ben Otto at ben.otto@wsj.com
(END) Dow Jones Newswires
July 07, 2020 23:13 ET (03:13 GMT)
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