Aviva gets AmerUs for $2.9 billion |
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Published
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Thu, 13 Jul 2006 15:05
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LONDON - Britain's biggest insurer Aviva PLC has agreed to buy US rival AmerUs for $2.9 billion. The companies had earlier announced that they were in takeover talks, but had not committed on a deal.
Aviva is all set to issue 900 million pounds ($1.7 billion) in shares in order to finance the deal.
The deal values AmerUs at $69 a share. The amount represents a 10 percent premium on the closing price for AmerUs on July 6 when the companies began talks. "This acquisition establishes a leadership position within a key segment of the world's largest long-term savings market," said Richard Harvey, Aviva CEO. "The combination of AmerUs' national distribution networks and the resources and expertise of Aviva, provides the platform for significant profitable growth in the U.S."
Aviva was linked to AmerUs in January, but had refuted rumors since it was pursing a merger deal with British rival Prudential. But Pru appeared to get cold feet and that deal was scrapped. After that Aviva turned its attention to AmerUs. The deal gives Aviva a foothold in the lucrative US market. If Prudential merger had gone ahead, Aviva would have gained a firm foothold in the Asian and American markets.
AmerUs is a leading insurer specializing in indexed long-term savings products including retirement savings products. The company also offers indexed life assurance. The American market is exploding with more and more people keen on these types of products.
AmerUs said it would ask shareholders to vote on the deal in the fourth quarter of the year, but was confident the deal would be closed before the year-end. "The combination of AmerUs and Aviva will open new opportunities for our producers and customers by providing a broader product portfolio," said Thomas Godlasky, CEO of AmerUs.
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Aviva may resort to direct approach to Prudential's shareholders 