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Conseco buying Green Tree
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April 7, 1998: 8:44 a.m. ET
Financial firms decide to join the consolidation trend in $7.6 billion deal
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NEW YORK (CNNfn) - In a further sign of financial firm consolidation, Conseco Inc. and Green Tree Financial Corp. said Tuesday they will merge in a stock swap worth approximately $7.6 billion.
The move comes just one day after Citicorp announced it would merge with Travelers Group Inc. in a deal worth $70 billion. That news elicited predictions from analysts of more financial consolidations in the works.
The Conseco-Green Tree pairing will create a consumer finance, life and health insurance company with a market capitalization of $20 billion. It will have managed investments and finance receivables of more than $65 billion, and 11 million customers.
The merger of Citicorp and Travelers was the highlight of what is becoming a pattern in the financial industry. Banking companies are looking to widen the variety of financial services they can offer customers, including insurance and brokerage.
Conseco Chief Executive Officer Stephen Hilbert alluded to the Citicorp-Travelers deal when announcing his own merger. "The financial services industry is converging rapidly, as recent events make abundantly clear," he said.
"Traditional categories and traditional companies are disappearing. The companies that will thrive in the future will have balanced, focused products [and] diversified distribution."
Green Tree brings to the deal its status as a player in providing financing for manufactured housing, home improvement and other consumer loans.
For its part, the Carmel, Ind.-based Conseco sells life and health insurance, along with other related investment products.
Under terms of the agreement, Green Tree shareholders will get 0.9615 share of Conseco stock (CNC) for each of their own shares (GNT) giving them about 38 percent of the combined company.
In connection with the merger agreement, Green Tree has granted Conseco an option to purchase 26.7 million shares of Green Tree common at $52.93 each.
The companies expect the deal to be completed in the third quarter of 1998, assuming they receive approval of shareholders and regulators. Both companies' boards already have approved the deal.
Green Tree will operate as a subsidiary of Conseco and continue to be managed from its headquarters in St. Paul, Minn. No changes are planned for its 6,000 employees at its 200 locations. 
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