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AIG reaches $2.2B deal
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December 22, 1997: 6:23 a.m. ET
American International will buy credit insurance company ABI
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NEW YORK (CNNfn) - American International Group Inc., a leading financial services company, on Monday announced a $2.2 billion merger agreement with American Bankers Insurance Group Inc.
ABI, which sells credit-related insurance coverage, will receive AIG stock in the deal, but has the option to receive 50 percent of the price in cash.
American International (AIG) is looking to increase its holdings in specialty insurance with the acquisition of the Miami-based company. ABI has strong operations in the credit industry, which is one of the few sectors of the financial services industry showing quick growth.
ABI also provides consumer warranties for appliances and consumer electronics through many large retailers.
The deal would be AIG's largest ever, surpassing its $1.26 billion merger deal with International Lease Finance Corp. in 1990. AIG has strong life insurance businesses in Asia and property casualty operations over the rest of the globe.
American Bankers had net income last year of $94.5 million last year and has earned $84.9 million so far in 1997, while AIG had a net income last year of $2.9 billion.
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