American Monetary Team sells annuity business enterprise to MassMutual for $3.5B, 600 employment influenced

American Monetary Group announced Wednesday it will sell its annuity business to Massachusetts Mutual Everyday living Insurance plan Co. for $3.5 billion in cash.

Carl Lindner III’s Cincinnati

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In a offer anticipated to shut just before June 30, MassMutual will obtain Terrific American Daily life Coverage Co. (GALIC) and its two coverage subsidiaries, Annuity Traders Daily life Coverage Co. and Manhattan National Everyday living Insurance plan 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
Good American Tower as found from the observation deck of Carew Tower in downtown Cincinnati on Wednesday, Feb. 5, 2020.

The Downtown-dependent specialty insurance company said MassMutual would set up a subsidiary in Cincinnati to work the obtained business enterprise and offer “persuasive occupation prospects for our annuity associates.”

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More than a fifth of American Financial’s 2,800 nearby staff would change companies as portion of the offer. The insurance provider employs 6,800 nationwide.

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American Financial said more than 600 employees in their annuity small business would join MassMutual as employees of the new unbiased MassMutual subsidiary.

The company unit sale won’t have an impact on American Financial’s naming rights to Great American Ball Park, firm officials mentioned.

Though the organization is marketing the Wonderful American annuity operations – and MassMutual will continue on to use that title for a period, American Financial’s flagship house and casualty operations, Great American Insurance policy Group, would not be afflicted.

American Economical operates almost three dozen subsidiaries, quite a few that use the “Great American” moniker, which dates to 1872.

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

MassMutual CEO Roger Crandall reported the offer diversifies its current annuity business, permitting it to arrive at more shoppers.

“This acquisition is an exceptional strategic in good shape for MassMutual that will broaden our product offerings, develop our distribution, and make extra earnings,” Crandall reported in a assertion. “We will make on the excellent management posture that the proficient and focused Great American Daily life crew has created more than generations.”

The deal will probably decrease American Financial’s in general revenues – and its position on the Fortune 500 checklist. Annuities are additional than 20{23996c8f5258275f450f40d5a867c22ad72c04895f28059581bc525cc6cb4bd0} of American Financial’s revenues. AFG was 383rd on the most current checklist.

American Financial’s annuity company created approximately $1.4 billion in revenues by way of Sept. 30 and $1.9 billion in 2019.

American Fiscal said the sale would book an immediately after-tax achieve of $620 million to $690 million upon closing. Prior to the offer closing, the corporation reported it would buy around $500 million in authentic estate-similar partnerships and immediately owned actual estate from GALIC.

Traders cheered the windfall as American Financial’s stock soared in Thursday early morning trading as superior as $93.04 – up 17.1{23996c8f5258275f450f40d5a867c22ad72c04895f28059581bc525cc6cb4bd0}.

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Co-CEO S. Craig Lindner claimed the deal would reinforce the insurer’s economic situation and give it the versatility to take a look at other options.

“We will continue on to appraise possibilities for deploying AFG’s extra funds, including the probable for wholesome, rewarding natural advancement, growth of our Specialty Residence & Casualty market companies through acquisitions and get started-ups that meet up with our goal return thresholds, as properly as share repurchases and exclusive dividends,” Lindner claimed in a statement.

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

This report initially appeared on Cincinnati Enquirer: American Economical Group sells annuity business to MassMutual for $3.5B, 600 careers affected

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