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The Hartford buys Fortis Financial for $1.12 billion
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.