Allstate Corp announced Tuesday that it will buy National General Holdings Corp for approximately $ 4 billion in cash as the US insurer seeks to increase its market share in the personal lines insurance industry.
National General shareholders will receive $ 32 per share in cash and closing dividends of $ 2.50 per share held. That would imply a total value of $ 3.92 billion and a premium of around 69% over Tuesday’s closing of National General, according to Reuters calculations.
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Allstate, one of America’s largest auto insurers, said the deal is expected to close early in 2021 and will increase adjusted earnings per share and return to equity starting in the first year.
|NGHC||NATIONAL GENERAL HLDGS CO||20,41||-0,49||-2,34%|
“The acquisition of National General accelerates Allstate’s strategy to increase the market share of personal property and liability and significantly expands our distribution of independent agents,” said Tom Wilson, chief executive officer of Allstate.
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The deal has been approved by the National General’s board of directors, Allstate said, adding that it included a $ 132.5 million breakup fee.
Ardea Partners was the financial advisor to Allstate, while JP Morgan Securities LLC advised National General.
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(Report by Shubham Kalia in Bengaluru, edited by Sherry Jacob-Phillips)