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Insurers in $665M deal
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December 23, 1996: 8:39 a.m. ET
American General to acquire Home Beneficial for $39 per share
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NEW YORK (CNNfn) - American General Corp. said Monday it had entered into a definitive agreement to acquire Home Beneficial Corp. for $665 million, or $39 per share in cash and stock.
American General, the Houston-based financial-services giant has been a major player in a recent consolidation trend in the life-insurance industry. The acquisition of Richmond, Va.-based Home Beneficial is the company's third in two years, for a total consideration of $2.2 billion, and would further solidify its position as one of the country's top five life insurers on the basis of sales.
American General said Home Beneficial shareholders can elect to receive either cash or American General common stock. Total cash elections will be limited to 50 percent of the aggregate consideration, and stock elections will be limited to 75 percent, the company said.
The deal is expected to close at the end of the first quarter of next year and result in annual savings of $20 million, American General said.
It said it expects the deal to be non-dilutive to earnings within a year of closing.
American General's offer of $39 per share represents a 33 percent premium on Home Beneficial's Friday closing price of $29.25 a share.
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American General
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