American International Group, Inc. will spend $813 million acquire the estimated 40 percent share of 21st Century Insurance Group it does not already own, the company announced today.
The New York-based financial services giant said it will pay $22 per share in cash for the Woodland Hills, Calif.-based company's stock.
AIG already owns, through its subsidiaries, approximately 60.8 percent of the outstanding shares of 21st Century. Upon completion of the transaction, 21st Century will become a wholly owned subsidiary of AIG.
The 21st Century board of directors unanimously approved the merger agreement following the recommendation and approval of a special committee comprised of 21st Century directors independent of AIG, the announcement said.
The $22.00 per share price represents a 32.6 percent premium over 21st Century's January 24 closing price, the last trading day before the public announcement of AIG's proposal to acquire the publicly held shares of 21st Century, and a 39.8 percent premium over 21st Century's average closing price for the twelve months prior to January 24.
Martin J. Sullivan, president and chief executive officer of AIG, said the deal will combine expertise and resources to grow the business.
“And it allows 21st Century shareholders to monetize their investment at a compelling value,” he said.
The merger is expected to be completed in the third quarter of calendar year 2007, subject to customary conditions and approvals. The exact timing is dependent on the review and clearance of necessary filings with the Securities and Exchange Commission, the company said.
The transaction is subject to the affirmative vote of the holders of a majority of the outstanding shares of 21st Century. AIG has agreed to vote or cause to be voted all of its shares and its subsidiaries' 21st Century shares in favor of the merger.
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