Fortis to Acquire American Bankers Insurance

Dutch-Belgian financial group Fortis said Monday that it is buying top U.S. consumer credit insurer American Bankers Insurance Group for $2.6 billion, doubling its U.S. insurance activities in one stroke.

In addition, bank insurer Fortis will assume $194 million of the Miami-based company’s debt, and cut about 300 U.S. jobs out of a total of 4,400 for the combined company.

Fortis said that combining its Atlanta-based American Security Group with American Bankers Insurance will result in an insurer that leads its sector, with annual gross premium income of $3.6 billion.

Fortis has 58,000 employees worldwide and a market capitalization of $42.2 billion. In 1997, it posted revenue of $23.1 billion.

American Bankers Insurance is active in North America, Latin America, the Caribbean and Britain, selling credit-related insurance tied to consumer financing. It has 2,950 employees and a market capitalization of almost $2 billion. In 1997, it had revenue of $1.62 billion.

Fortis will pay $55 in cash per ordinary ABI share, adding a 19% premium to the March 5 closing price of $46.38.

American Bankers Insurance shares jumped $5.63 to close at $52 on the New York Stock Exchange.