National General Holdings (NGHC) - Get Report is in good hands with insurance giant Allstate (ALL) - Get Report following Allstate's roughly $4 billion offer to bring the property and liability insurance into its fold.
Allstate announced on Wednesday that it will pay $34.50 a share for National General, about 69% more than the $20.41 closing price Tuesday. Allstate will fund the deal with $2.2 billion in cash resources and by issuing $1.5 billion in new senior debt.
The acquisition "accelerates Allstate's strategy to increase market share in personal property-liability and significantly expands our independent agent distribution," Allstate CEO Tom Wilson said in a statement.
“National General’s business and technology platforms will be utilized to further strengthen Allstate’s existing independent agent businesses,” he added.
The deal comes as insurance companies struggle to acclimate to the coronavirus pandemic, which has shifted both personal and business insurance needs and claims dramatically, particularly in the car and property insurance world.
Allstate and other auto insurers saw vehicle claims plummet during pandemic-related shutdown orders that kept people off the roads, and have even returned premiums to customers. On the business insurance side, widespread closures of everything from retail stores to office buildings have shifted needs for on-site commercial coverage.
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