By Lisa Kerner
Charlotte, N.C., May 15 - American International Group, Inc. entered into a definitive merger agreement to acquire 21st Century Insurance Group for $22 per share in cash, in a deal valued at about $813 million.
AIG already owns roughly 60.8% of the outstanding shares of 21st Century through its subsidiaries. Following the transaction's close, expected in the third quarter of 2007, 21st Century will become a wholly owned subsidiary of AIG.
The 21st Century board of directors unanimously approved the merger agreement. Company president and chief executive officer Bruce Marlow will lead AIG's direct private passenger auto operations, which will be comprised of 21st Century and AIG Direct.
"The special committee carefully reviewed the transaction in consultation with our financial and legal advisors, and the merger agreement was the result of this examination and extensive negotiations between the parties," John B. DeNault III, chairman of the special committee, said in a company news release.
"We believe the merger is in the best interests of 21st Century's minority stockholders."
The special committee was advised by Lehman Brothers Inc. and Skadden, Arps, Slate, Meagher & Flom LLP.
Banc of America Securities LLC and J.P. Morgan Securities Inc. are AIG's financial advisers and Sullivan & Cromwell LLP is AIG's legal adviser in the transaction.
Direct-to-consumer personal auto insurance provider 21st Century is located in Woodland Hills, Calif.
AIG is an insurance and financial services company based in New York.
| Acquirer: | American International Group, Inc.
|
| Target: | 21st Century Insurance Group
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| Transaction value: | $813 million
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| Price per share: | $22
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| Announcement date: | May 15
|
| Expected closing: | Third quarter of 2007
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| Stock price for target: | NYSE: TW: $21.00 on May 14
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