The Hartford Financial Services Group will
acquire the individual life insurance, annuity, and mutual fund
businesses of Fortis Financial Group for $1.2 billion.
The
Hartford, based in Hartford, Conn., will acquire Fortis Financial's $11
billion of assets under management and add Fortis' 3,000 sales
producers. The transaction is expected to be completed by the second
quarter of 2001. Fortis Financial, based in Woodbury, Minn., is a
subsidiary of Fortis Inc., which is based in Belgium.
| "By adding Fortis' businesses to our portfolio, we have demonstrated our desire and ability to be a consolidator." |
"The ongoing consolidation in the mutual fund and life insurance
industries has made scale a critical factor in sustaining market
leadership," says Ramani Ayer, chairman and CEO for The Hartford. "By
adding Fortis' businesses to our portfolio, we have demonstrated our
desire and ability to be a consolidator."
Ayer says that the acquisition will add "significant scale" to Hartford Life's individual life insurance
businesses and enhance its "leadership position" in variable annuities.
Hartford Life is the top variable annuity company in the United States,
with sales of over $7.5 billion as of the third quarter of 2000,
according to the Variable Annuity Research and Data Service (VARDS).
Lon
Smith, president and CEO of Hartford Life, says the acquisition will
propel his company to being the third-largest writer of variable life
insurance in the United States and increase assets under management for
its mutual fund business by 30 percent.
In announcing
the Fortis deal, The Hartford also released its fourth quarter 2000 and
year-end financial results. The company's core earnings for the fourth
quarter 2000 were $252 million, up 14 percent from $221 million in the
fourth quarter of 1999. For the year-end 2000, core earnings were $962
million, up 17 percent from $837 million for year-end 1999.
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