Aviva PLC, a London insurance company, said Thursday that it had agreed to buy AmerUs Group Co. of Des Moines for about $2.9 billion, prospectively giving itself a leading presence in high-growth segments of the U.S. retirement and savings markets.
Aviva said it would combine AmerUs with its U.S. unit under the Aviva name. Tom Godlasky, AmerUs’ chief executive officer, is to head the U.S. operation, which will be headquartered in Des Moines.
AmerUs stockholders are to get $69 in cash per share, a 10% premium to the closing price on July 6, and the deal is expected to close in the fourth quarter.
The British insurer has spent the past year trying to expand through acquisition. This year it made and withdrew a $30 billion bid for Prudential PLC, another London insurer.
AmerUs is the largest provider by sales of indexed life insurance products in the United States and one of the country’s top five providers of indexed annuities. It is also third in sales of equity-indexed annuities, with $1.6 billion of revenue and $327 million of pretax operating income last year. The purchase would quadruple Aviva’s scale in this country.
The merger of AmerUs with Aviva USA is expected to generate annual cost savings of $45 million before tax by 2008. Integration costs are expected to be about $50 million before tax.
Aviva USA distributes its products through a network of 5,500 independent agents, specialist brokers, and bank distribution agreements. AmerUs sells its products through a distribution system with national scale, and proprietary distribution accounted for 83% of its annuity sales last year.
