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AIG Moves Ahead On American General Acquisition

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American International Group is trying to get all the regulatory approvals it needs to acquire American General Corp. by the end of the month.

Texas Insurance Commissioner Jose Montemayor has agreed to the companies’ request to move the date for the Texas hearing on the acquisition up to Aug. 28, from Sept. 5.

The Texas hearing will feature public testimony on AIGs plans to acquire a number of American General insurance subsidiaries, including American General Annuity Insurance Company, American General Life Insurance Company, The National Life and Accident Insurance Company and The Variable Annuity Life Insurance Company.

AIG and American General also need permission from insurance regulators in Arizona, Indiana and Pennsylvania.

Meanwhile, American General says its shareholders voted “overwhelmingly” to approve the AIG deal. Voting ended at a special American General shareholder meeting Aug. 15. The final tally was not immediately available.

Prudential P.L.C., London, which is unrelated to Prudential Insurance Company of America, offered to acquire American General for stock in March, but Prudential shareholders objected and drove down the price of Prudential shares.

AIG followed in April with a bid of its own. AIG has agreed to pay American General shareholders AIG stock with a total value of $23 billion, or $46 for each share of American General stock. The AIG/American General agreement includes a “collar” mechanism to help keep the value of the deal stable even if the price of AIG shares falls.

Reproduced from National Underwriter Life & Health/Financial Services Edition, August 27, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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