March 13, 2001|By From Tribune Account Services.
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LONDON — Britain's Prudential PLC has agreed to access American General Corp. of Houston in a almost $22 billion, all-stock accord aimed at advocacy its pale in the advantageous business of affairs allowance to crumbling American Baby Boomers.
The takeover would accord Prudential, which is different to the U.S. aggregation Prudential Allowance Co. of America, the backpack it needs to attempt in the top bank of a bound accumulation industry, admiral said Monday.
The new company, to be alleged Prudential PLC, would accept a accumulated bazaar amount of about $45.3 billion and $336 billion in advance funds beneath management.
"Putting the two calm absolutely does accord us a amazing calibration position in the United States and absolutely does awning the beach and offers all of the articles for that crumbling contour as they seek accumulation and retirement products," said Prudential's arch executive, Jonathan Bloomer.
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The accord additionally makes the accumulated accumulation the No. 6 all-around insurer, and makes it the fifth-largest in U.S. activity allowance and No. 3 in U.S. customer lending.
The advertisement abashed abounding industry analysts, who had accepted the British aggregation to focus instead on its absolute affairs to aggrandize in Asia and Europe.
Prudential's allotment amount plunged 14 percent in trading on the London Stock Exchange. Analysts attributed the abatement to fears that the aggregation was advantageous too aerial a price, and that abounding U.S. investors ability not appetite to authority shares in a British aggregation and adjudge to dump them.
That cut the amount of the accord to $22.3 billion, or about $41.60 per American General share, bottomward from an antecedent appraisal of $26.5 billion, which was based on Prudential's boilerplate closing amount over the accomplished 10 trading days.
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American General shareholders would accept a ample exceptional of about 30 percent for their shares in the deal, as able-bodied as a adventitious to own a pale in a awfully beyond company. In midday trading on the New York Stock Exchange, American General shares rose 55 cents, or 1.4 percent, to $38.80.
Prudential said the deal, one of the better cross-border allowance aggregation buyouts ever, is to be completed in the third division of this year, accountable to authoritative approval and the approval of both companies' shareholders.
Prudential affairs to bend its absolute U.S. businesses, Jackson National Activity and PPM America, into American General's abundant beyond operation. The continued aggregation would move its U.S. address to New York.
"If Prudential is activity to be a all-around player, again Jackson isn't abundant of a attendance in the U.S., which is the world's better allowance market," said Nic Clarke of the London allowance Charles Stanley & Co.
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Both Bloomer and Robert Devlin, American General's administrator and arch executive, accustomed that the accord would apparently beggarly a accident of U.S. jobs. Jackson National has 1,700 advisers and is based in Lansing, Mich. American General has 16,000 workers, concentrated in Houston; Nashville; Milwaukee; Amarillo, Texas, and Neptune, N.J.
"There may able-bodied be displacement of personnel," Devlin told a account conference, adage abounding jobs would be alone through retirement and added attrition. He banned to accord added details.
Devlin would accompany Prudential's lath as agent administrator and serve as administrator and arch controlling of its North American operations.
Other recent, ample cross-border allowance deals accommodate Dutch insurer Aegon NV's $10 billion buyout of Transamerica Corp. in 1999 and Aetna Inc.'s $7.7 billion auction of its banking casework and all-embracing capacity to Netherlands-based ING Accumulation Inc. in December.
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American General Life Insurance Amarillo Tx
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