NEW YORK (CNNfn) - General Motors Corp.'s finance arm and Integon Corp. said Monday that they will merge in a cash transaction valued at $550 million.
General Motors Acceptance Corp. will pay Integon holders $26 per share, which holders of Integon's $3.875 convertible stock also will receive.
Integon stock was halted in trading Monday at $16 per share. General Motors closed down 1/8 at 55-1/2.
Integon's board has unanimously approved the deal, which now must win stockholder and regulatory approval, according to a joint statement.
The proposed merger culminates efforts by both companies to expand their reach in the financial services industry. Integon specializes in underwriting and marketing nonstandard and other specialty automobile insurance products to individuals. GMAC helps buyers finance General Motors cars and trucks.
"The merger of Integon with GMAC will strategically complement the direct response preferred and standard personal lines insurance written by GMAC's present insurance subsidiaries," according to the joint statement.