In a week that has seen Norwich Union parent Aviva's £17bn bid for Prudential rejected and then with...
In a week that has seen Norwich Union parent Aviva's £17bn bid for Prudential rejected and then withdrawn with new potential predators circling, we look back five years to a time when Prudential was itself the hungry acquisitor rather then the tasty takeover target it has since become, as reported by Post Magazine in March 2001.
Prudential's £14.2bn acquisition of American General is unlikely to start a charge by other UK insurers to boost their stake in the massive US insurance market.
The deal, the largest transatlantic tie-up in the finance sector, catapults Prudential from 26th to 6th in the league of world insurers by market capitalisation. The Prudential's nearest UK competitors in terms of size, CGNU and Royal and Sun Alliance, both ruled out imminent US moves.
Eamonn Flanagan, an analyst at Charterhouse, said he was "not convinced" that other UK insurers would follow Prudential, though he regarded the £14.2bn price tag as reasonable, despite a fall in the share price. "If you want to buy quality, you have to pay for it," he said. "What it gives them in the US is quite formidable."
American General is the second largest life insurer in the US, and the number one in terms of fixed annuities, according to Charterhouse.
Prudential will have a 50.5% stake in the new company, with Sir Roger Hurn continuing as chairman and Jonathan Bloomer as chief executive.
Robert Devlin, chairman and chief executive officer of American General, will join Prudential's board as deputy chairman.
The combined group, with a market capitalisation base of approximately £30bn and funds under management of £229bn, will be headquartered in London.
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