American International Group, Inc. reports it has completed the previously announced merger of a wholly owned subsidiary of AIG with 21st Century Insurance Group.
Upon consummation of the merger, AIG acquired the 39.3 percent of the 21st Century shares it did not previously own for approximately $813 million, or $22.00 per share in cash.
AIG already owns, through its subsidiaries, approximately 60.8 percent of the outstanding shares of 21st Century. Upon completion of the transaction, 21st Century will become a wholly owned subsidiary of AIG.
The $22.00 per share price represents a 32.6 percent premium over 21st Century’s closing price on January 24, 2007, the last trading day before the public announcement of AIG’s proposal to acquire the publicly held shares of 21st Century and a 39.8% percent premium to 21st Century’s average closing price for the 12 months prior to January 24, 2007.
Now that the merger has been completed, AIG said that integration plans have begun and will substantially take place through 2008.
The new combined organization, to be named aigdirect.com, will be headquartered in Wilmington, Delaware and Woodland Hills, Calif. Bruce Marlow, chief executive officer of 21st Century, will serve as president, and Tony DeSantis, president of AIG Marketing, will serve as chief operating officer.
The company said it plans an aggressive information technology integration process to be completed in three years.
As a result of the merger, duplicate positions exist in both the home office/corporate functions and in the field organization. Positions to be eliminated, as well as the locations scheduled for closing over the next two years have been identified, and will result in job actions that will affect about 11 per cent of the combined workforce.
The company said that employees affected by the merger have been briefed concerning the job actions and timing, severance arrangements, and the availability of positions within the organization. Wherever possible, those employees have been encouraged to apply for open positions in other parts of the organization.