Prudential Financial Inc. has completed previously announced acquisitions of two Japan-based units of American International General Inc. (AIG).
Prudential, Newark, N.J. (NYSE: PRU), says the company is paying a total of about $4.8 billion for AIG Star Life Insurance Company Ltd., Tokyo, and AIG Edison Life Insurance Company, Tokyo.
Prudential is paying AIG, New York (NYSE:AIG), about $4.2 billion in cash and assuming $600 million in third-party debt.
Prudential says it expects to repay “substantially” all of the debt with excess capital from the acquired entities. The transaction will not affect the policies or rights of Star and Edison customers, Prudential says.
Star and Edison will operate as subsidiaries of Gibraltar Life Insurance Company Ltd., one of Prudential Financial’s life insurance companies in Japan.
Star and Edison’s bancassurance channels will be transferred and integrated with Prudential Gibraltar Financial Life Insurance Company Ltd., a subsidiary of Gibraltar that operates in Japan’s bancassurance market.
Prudential hopes to merge and integrate Gibraltar and the core operations of Star and Edison, excluding the bancassurance business, into one entity during the first quarter of 2012, Prudential says.
Until the merger is complete, Star and Edison will continue to use their existing legal names.