AIG Buys Auto Insurance

American International Group, AIG, already owns more than 60% of 21st Century Insurance Group, which is one of California’s largest auto insurance companies. They are now looking to take the auto insurance company over altogether. They are purchasing the company for $813 million in a cash deal, and will pay $22 a share for it.

They had previously offered the auto insurance company $19.75 per share, so obviously the new price was much more desirable. 21st will now be a wholly owned subsidiary of AIG when the deal is completed. After the deal, Bruce Marlow, who is 21st Century’s President and CEO, will head AIG’s direct private passenger auto insurance operations, which will be both companies combined.

The Board of Directors of 21st Century has unanimously approved the merger, and AIG says that this is a win for both companies. They say that it allows them to combine the “expertise and resources” of both of the companies to come up with a better product together. This ends up being good for their shareholders, good for their employees, and good for their customers.

21st Century has been around since 1958, and is a direct to consumer auto insurance company for personal auto insurance. They have more than $1.4 billion in revenue for last year, and this merger should be completed by the end of the third quarter of this year.

Back to August 2007 Archives