Prudential is to acquire the US insurance company American General for £17.5bn in a deal which will make it the sixth largest insurance group in the world.
The all-share acquisition is part of Prudential's US strategy and is likely to have little impact on the UK general insurance business. The company writes around £300m a year of general insurance in the UK.
It is paying a 28% premium for the US company, valuing its shares at $49.52 (£33.85). The new company will be worth around £31bn, based on recent share prices.
Shares in Prudential slumped by more than 14% on the London Stock Exchange after the deal was announced on Monday, but Prudential denied that it had paid too much for the company.
Under the deal Prudential will own 50.5% of the merged group.
Shareholders were concerned that that the company had offered up almost half of its equity in the combined group to secure American General at a time when US economic growth was slowing.
Jonathan Bloomer, chief executive of Prudential, will be chief executive of the new company. He said the two companies had a good fit.
“We have highly complementary business operations,” he said.
American General specialises in life insurance, annuities and consumer finance.
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
