American International Group (AIG) has completed its purchase of Texas-based American General Corp. in a stock deal worth $23 billion, the companies announced Aug. 29, 2001.

The deal closed after the Texas Department of Insurance gave its approval on Aug. 28. American General's shareholders voted to give the green light on Aug. 15.

The purchase gives American General shareholders 0.5790 shares of AIG stock for each share of American General stock.

American General wooed away from British suitor

The deal was announced in May 2001, more than one month after AIG's bid for American General derailed plans for United Kingdom-based Prudential PLC to acquire American General in a stock deal that was originally worth $26 billion. Prudential's offer plummeted in value to around $20 billion when Prudential PLC's stock took a nosedive after the merger was announced.

American General paid $600 million to Prudential to break off that merger. Prudential dropped its lawsuit, filed in Texas court in April 2001, charging AIG with "tortious interference" in its counteroffer for American General.

"The combination of AIG and American General is uniquely attractive, in terms of mix of businesses and distribution channels, and would be highly beneficial financially to both of our shareholder groups," says AIG Chairman Maurice Greenberg.

American General, based in Houston, is a major U.S. life insurer also engaged in consumer lending, retirement planning, and asset management. AIG is a U.S.-based insurer with a global presence in commercial insurance, personal lines insurance, financial services, and asset management.