Ameriprise Financial (AMP) - Get Report shares rose more than 3% Tuesday to $137.03 after the company announced that it sold its Ameriprise Auto & Home insurance unit to American Family Insurance Mutual Holding Co. for $1.05 billion in cash.
Ameriprise will book proceeds of about $950 million from the deal after a payment to an affinity partner. The company said that it decided to pursue a sale following a previously disclosed review of the AAH business and determination that now was the time to exit.
"We are proud of the exceptional value and award-winning service we've provided to Auto & Home policyholders over the last several decades and we sincerely thank each and every employee for their dedication and contributions," said Jim Cracchiolo, chairman and CEO of Ameriprise Financial. "This transaction is consistent with our strategy to grow our less capital-intensive businesses and is expected to reduce our risk profile and increase capital flexibility."
The transaction is expected to close in the second half of 2019 with Credit Suisse acting as financial adviser and Skadden, Arps, Slate, Meagher & Flom acting as the legal adviser.
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