NU Online News Service, Aug. 29, 10:35 a.m. – American International Group Inc., New York, today completed its previously announced acquisition of American General Corp., Houston.
AIG is acquiring American General through a stock swap with a value of about $21 billion. The final exchange ratio, based on a closing date of Aug. 29, will be 0.579 share of AIG stock for each share of American General common stock, AIG says.
American General has had about 500 million shares of common stock outstanding. About 440 million of the shares have been in the hands of investors, according to Commodity Systems Inc., Boca Raton, Fla.
The price of AIG shares closed Tuesday at $70.77.
AIG first revealed its interested in American General April 3, when it announced an alternative to an earlier offer made by Prudential Corp. P.L.C., London, a British insurer that is unrelated to Prudential Insurance Company of America, Newark, N.J.
Prudential pulled out because its proposed American General deal was unpopular with its own shareholders, and the AIG proposal appeared to be more popular with American General shareholders.
AIG and American General raised eyebrows two weeks ago when they publicized their eagerness to complete their deal by the end of August. Some analysts wondered whether that goal was realistic. But the Texas Department of Insurance helped the companies achieve stick to their schedule by approving the deal Tuesday.
AIG is one of the biggest property-casualty insurers in the world, and a major seller of life and health insurance outside the United States.
Completing the American General deal will make AIG a bigger player in the U.S. life insurance market, and one of the biggest players in the U.S. retirement savings market, AIG says.
AIG Chairman Maurice Greenberg issued a statement saying that AIG and American General will cancel an AIG stock buyback program and begin implementing “revenue enhancement programs.”
AIG gave no details about the revenue-enhancement programs.