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American National to merge with Farm Family Holdings in $280 million deal
Editor's note: On April 6, 2001, the New York Department of Insurance approved American National Insurance Co.'s acquisition of Farm Family Holdings. Farm Family shareholders had previously approved the deal on Feb. 27, 2001, and the companies expect to close the transaction on April 10, 2001.
Seeking to grow its business in the Northeast and to tap into agricultural markets across the United States, American National Insurance Co. will merge with Farm Family Holdings.
|"We view this as an opportunity to increase the strength of both companies."|
American National will acquire Farm Family for $44 per share for Farm Family's common stock and $35.72 per share for its preferred stock. The value of the deal is estimated to be worth $280 million. The deal is expected to be completed late in the first quarter of 2001.
American National, based in Galveston, Texas, sells individual and group life insurance, group health insurance, auto and homeowners insurance, credit insurance, and mutual funds. Farm Family, based in Albany, N.Y., sells auto and homeowners insurance to farm-related businesses, as well as life insurance, annuities, and disability insurance.
Gregory Ostergen, president and CEO of American National Property and Casualty Co., a subsidiary of American National, says the deal will give his company three insurance companies domiciled in New York: Farm Family Casualty Insurance Co., Farm Family Life Insurance Co., and United Farm Family Insurance Co. He says that will allow his company to expand in the Northeast, as well as into other agricultural markets throughout the U.S.
"This is part of our strategic plan to add strong companies to our existing financial services network," he says. "We view this as an opportunity to increase the strength of both companies."
The deal is subject to approval from the New York Department of Insurance and Farm Family's stockholders. The companies expect the deal to be completed by the first quarter of 2001.