American Economical Group sells annuity enterprise to MassMutual for $3.5B, 600 jobs impacted

George T. Taft

American Fiscal Team introduced Wednesday it will provide its annuity organization to Massachusetts Mutual Life Insurance policies Co. for $3.5 billion in money.

Carl Lindner III’s Cincinnati


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In a offer expected to near just before June 30, MassMutual will purchase Fantastic American Life Insurance policy Co. (GALIC) and its two insurance policies subsidiaries, Annuity Buyers Everyday living Insurance policy Co. and Manhattan Countrywide Life Insurance Co.

a large building with a mountain in the background: Great American Tower as seen from the observation deck of Carew Tower in downtown Cincinnati on Wednesday, Feb. 5, 2020.

© Sam Greene/The Enquirer
Excellent American Tower as found from the observation deck of Carew Tower in downtown Cincinnati on Wednesday, Feb. 5, 2020.

The Downtown-primarily based specialty insurer said MassMutual would build a subsidiary in Cincinnati to function the acquired business and give “powerful vocation options for our annuity associates.”


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Extra than a fifth of American Financial’s 2,800 nearby employees would adjust companies as element of the offer. The insurance company employs 6,800 nationwide.

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American Money said more than 600 workers in their annuity business would join MassMutual as staff of the new independent MassMutual subsidiary.

The company unit sale will not likely influence American Financial’s naming legal rights to Great American Ball Park, organization officials reported.

Though the business is marketing the Good American annuity operations – and MassMutual will carry on to use that identify for a interval, American Financial’s flagship assets and casualty operations, Terrific American Insurance Group, will not be impacted.

American Monetary operates practically a few dozen subsidiaries, many that use the “Terrific American” moniker, which dates to 1872.

MassMutual said Great American Lifestyle will keep on to be led by its latest president, Mark Muething.

MassMutual CEO Roger Crandall mentioned the deal diversifies its existing annuity business enterprise, allowing it to achieve extra prospects.

“This acquisition is an exceptional strategic healthy for MassMutual that will broaden our solution offerings, broaden our distribution, and create added earnings,” Crandall claimed in a assertion. “We will build on the outstanding management placement that the talented and dedicated Fantastic American Lifetime group has created in excess of generations.”

The offer will probably lessen American Financial’s general revenues – and its position on the Fortune 500 checklist. Annuities are a lot more than 20% of American Financial’s revenues. AFG was 383rd on the most current list.

American Financial’s annuity business created practically $1.4 billion in revenues as a result of Sept. 30 and $1.9 billion in 2019.

American Economical reported the sale would book an right after-tax obtain of $620 million to $690 million on closing. Prior to the offer closing, the organization said it would buy roughly $500 million in real estate-relevant partnerships and directly owned authentic estate from GALIC.

Traders cheered the windfall as American Financial’s stock soared in Thursday early morning trading as higher as $93.04 – up 17.1%.

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Co-CEO S. Craig Lindner said the offer would bolster the insurer’s economic placement and give it the flexibility to check out other chances.

“We will continue on to evaluate alternatives for deploying AFG’s extra capital, which includes the possible for wholesome, financially rewarding organic and natural expansion, enlargement of our Specialty Property & Casualty niche businesses by means of acquisitions and start out-ups that satisfy our focus on return thresholds, as perfectly as share repurchases and distinctive dividends,” Lindner claimed in a assertion.

For the most current on Cincinnati small business, P&G, Kroger and Fifth Third Bank, follow @alexcoolidge on Twitter.

This write-up initially appeared on Cincinnati Enquirer: American Monetary Group sells annuity business to MassMutual for $3.5B, 600 positions influenced

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