NEW YORK--Apr. 16, 2009--
American International Group, Inc. (AIG) and Zurich Financial Services
Group (Zurich) announced today an agreement to sell 21st Century
Insurance Group, the wholly owned subsidiaries comprising AIG’s U.S.
personal auto insurance business, to Farmers Group, Inc. (FGI), a
subsidiary of Zurich. Under the terms of the transaction, FGI will pay
AIG $1.9 billion, consisting of $1.5 billion in cash and $400 million in
face amount of subordinated, euro-denominated capital notes backed by
Zurich Insurance Company, Zurich’s principal operating unit. FGI will
also assume 21st Century’s outstanding debt of $100 million. The
transaction is subject to satisfaction of certain conditions, including
approvals by appropriate regulatory authorities.
21st Century, based in Wilmington, Delaware, includes the former AIG
Direct business and Agency Auto business. The company operates in 49
states and Washington, D.C. In 2008, 21st Century reported total
premiums of $3.6 billion, including $2.7 billion in direct sales and
$900 million through independent agents.
The transaction excludes AIG’s Private Client Group, which provides
property and casualty insurance to high net worth individuals.
“We are very pleased to reach agreement on a $2 billion transaction,
especially in this market environment,” said Edward Liddy, AIG’s
chairman and chief executive officer. “In addition, we are moving
forward with discussions for several other transactions, and we continue
to evaluate how best to assure the continued strength and success of all
of AIG’s businesses.”
Anthony J. DeSantis, president and chief executive officer of 21st
Century, said, “Both 21st Century and Farmers are strong companies,
providing policyholders with exceptional levels of service and
personalized coverage. This is an excellent fit and we look forward to a
smooth integration that will be seamless to our customers.”
Banc of America Securities LLC acted as financial advisor and Sidley
Austin LLP acted as legal counsel to AIG on this transaction. Blackstone
Advisory Services provided financial advice to AIG in connection with
AIG’s global restructuring program.
American International Group, Inc. (AIG), a world leader in insurance
and financial services, is the leading international insurance
organization with operations in more than 130 countries and
jurisdictions. AIG companies serve commercial, institutional and
individual customers through the most extensive worldwide
property-casualty and life insurance networks of any insurer. In
addition, AIG companies are leading providers of retirement services,
financial services and asset management around the world. AIG's common
stock is listed on the New York Stock Exchange, as well as the stock
exchanges in Ireland and Tokyo.
Source: American International Group
American International Group