Allstate to acquire National General for $34.50 per share, in cash
The companies said in a release, “The transaction is expected to close in early 2021, subject to regulatory approvals and other customary closing conditions.
National General provides a wide range of property-liability products through independent agents with a significant presence in non-standard auto insurance.
The company also has attractive Accident and Health and Lender-Placed Insurance businesses.
Gross premiums written were $5.6 billion, which generated operating income of $319 million in 2019.
National General shareholders will receive $32.00 per share in cash from Allstate, plus closing dividends expected to be $2.50 per share, providing $34.50 in total value per share.
Allstate will fund the share purchase by deploying $2.2 billion in combined cash resources and, subject to market conditions, issuing $1.5 billion of new senior debt.
Allstate expects to maintain its current share repurchase program.
National General’s board of directors has approved the transaction, which includes customary terms and conditions, including a breakup fee of $132.5 million.
A voting agreement has also been signed with entities controlling 40% of National General’s common shares to vote for the transaction.
MSD Capital, which owns approximately 7.4% of National General’s outstanding common shares, also supports the transaction.
NGHC closed at $20.41.
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