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U.S. insurance giant Allstate Corp. said it has agreed to acquire peer National General Holdings Corp. for about $4 billion in cash, expanding its reach in the personal property-liability business.
Under the deal, shareholders of National General NGHC, +64.33% , a New York-based specialty personal-lines insurer, will receive a total of $34.50 a share, an offer that comprises $32.00 a share from Allstate ALL, -2.24% and expected closing dividends of $2.50 a share, the companies said late Tuesday. The total offer represents a 69% premium to the stock’s last-traded price.
Allstate, a top issuer of auto and home insurance policies, will fund the deal with $2.2 billion in cash resources and by issuing $1.5 billion in new senior debt. National General’s board has approved the transaction, which includes a breakup fee of $132.5 million. The companies said the deal is expected to close early next year, subject to regulatory approvals.
The acquisition “accelerates Allstate’s strategy to increase market share in personal property-liability and significantly expands our independent agent distribution,” said Tom Wilson, chairman and chief executive of Allstate, which is based in Northbrook, Ill.
An expanded version of this report appears at WSJ.com.
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Write to Ben Otto at ben.otto@wsj.com
