Personal lines insurer National General to be acquired by Allstate for $4bn
Allstate acquisition of National General : The Allstate Corporation has signed an all-cash deal worth around $4 billion to acquire National General Holdings Corporation in a move to grow its personal lines market position in the US.
National General’s shareholders are being offered $34.50 per share.
Headquartered in New York, National General is a specialty personal lines insurance holding company that has a variety of property-liability products to offer to customers via a network of approximately 42,300 independent agents. The company, which is said to have a considerable presence in non-standard auto insurance, also has an attractive accident and health and lender-placed insurance businesses, as per Allstate.
Gross premiums written of National General were $5.6 billion in 2019, while the operating income in the same period was $319 million.
Commenting on Allstate acquisition of National General, Tom Wilson – Allstate Chair, President, and CEO said: “The acquisition increases personal lines premiums by $4.0 billion and market share by over 1 percentage point to 10%.
“National General’s business and technology platforms will be utilized to further strengthen Allstate’s existing independent agent businesses. The transaction will be accretive to adjusted net income earnings per share and return on equity beginning in the first year.”
National General’s board of directors has approved the deal, which covers customary terms and conditions, including a $132.5 million breakup fee. Allstate has secured a voting agreement with entities that have a controlled stake of 40% stake in National General to support the deal.
Besides, MSD Capital, which owns nearly 7.4% of National General’s outstanding common shares, is also backing the transaction.
Barry Karfunkel – Co-Chairman and CEO of National General, commenting on Allstate acquisition of National General, said: “National General’s operating expertise has enabled us to serve customers and independent agents well as we have grown both organically and through acquisition.
“We are excited about combining our team’s expertise and commitment with Allstate to become a top-five personal lines carrier for independent agents while offering a broader array of products. National General’s shareholders are also benefiting by unlocking the value created over the last decade.”
The financial adviser for Allstate in the deal is Ardea Partners, while Willkie Farr & Gallagher is the legal adviser. For National General, the financial adviser has been J.P. Morgan Securities, while Paul, Weiss, Rifkind, Wharton & Garrison has been the legal counsel.
Allstate acquisition of National General is expected to close early next year should it get regulatory approvals and meet other customary closing conditions.