Allstate expands its insurance portfolio by acquiring National General Holdings Corp. for $4 billion in cash.
Shareholders of National General will get $32 per share they have, plus closing dividends of approximately $2.50 per share, with a total of about $34.50 each.
National General had an operating income of $319 million in 2019 from gross premiums of $5.6 billion. Most income was from a range of property-liability coverage including auto insurance.
New acquisition expected to increase market share
Allstate said that the new acquisition specifically the business and technology of the National General will bolster its existing independent agent business. National General will increase premiums by $4 billion and market share by at least one percentage point.
The deal has already been approved by the board of National General Holdings Corp and is expected to close in 2021. According to the New York insurer, less than 40% of its voting shares have committed to approving the deal.
The acquisition included a breakup fee of $132.5 million. “Acquiring National General accelerates Allstate’s strategy to increase market share in personal property-liability and significantly expands our independent agent distribution,” Allstate Chief Executive Officer Tom Wilson said.