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Filed by American International Group, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: American General Corporation
Commission File No. 1-7981
American International Group, Inc. ("AIG") and American General Corporation
("AGC") issued a joint press release on May 11, 2001 announcing that they had
entered into an agreement and plan of merger as of that date and had
concurrently entered into an agreement relating, among other matters, to the
termination of AGC's previously existing agreement and plan of merger with
Prudential plc. Set forth below is the text of that release:
[AIG LETTERHEAD]
NEWS
Contact: For AIG: For American General:
Joe Norton John Pluhowski
(News Media) (News Media)
212/770-3144 713/831-1149
Charlene Hamrah Ken Brause
(Investment Community) (Investment Community)
212/770-7074 212/446-3107
AIG TO ACQUIRE AMERICAN GENERAL FOR $46 PER SHARE
-------------------------------------------------
NEW YORK and HOUSTON, May 11, 2001 -- American International Group, Inc. (NYSE:
AIG) and American General Corporation (NYSE: AGC) today announced that they have
entered into a definitive agreement under which American General shareholders
will receive $46 per American General share in AIG common stock, subject to a
collar mechanism. The transaction, which has been approved by the boards of
directors of both companies, will be a tax-free organization and will be treated
as a "pooling of interests" for accounting purposes. The transaction values
American General at approximately $23 billion.
Simultaneous with entering into this definitive agreement, American General
terminated its previous merger agreement with Prudential plc, and paid
Prudential the $600 million termination fee specified in that agreement.
Commenting on the announcement, AIG Chairman and CEO, M.R. Greenberg said,
"We are very pleased to have reached this agreement with American General, whose
leading positions in life insurance, retirement savings products, and consumer
finance will enhance AIG's business portfolio, both in terms of products and
distribution. The acquisition of American General will significantly strengthen
our position in the domestic life insurance market. In addition, American
General's annuity businesses will complement AIG's existing retirement savings
business, giving us an even stronger platform from which to capitalize on the
significant growth we see in retirement savings in the years ahead. We also look
forward to deploying American General's expertise in U.S. consumer finance to
accelerate AIG's expanding global consumer finance business. As part of this
acquisition, we are also very pleased we could reach an amicable solution with
Prudential."
"We are excited about joining AIG, the world's leader in insurance and
financial services," said Robert M. Devlin, American General Chairman and CEO.
"This transaction represents an outstanding strategic fit for both companies.
It will create superior value for our shareholders, expanded financial
solutions for our customers and significant opportunities for employees and
distribution partners. American General's strong franchise positions in life
insurance, annuities, and consumer lending will become a significant
contributor to AIG's domestic operations and will enhance the company's global
capabilities. On behalf of American General's board of directors and our
management team, I would like to thank the men and women of American General
for their outstanding contributions to this pivotal moment in our 75-year
history."
American General shareholders will receive AIG common stock according to
an exchange ratio that will be determined based on the 10-day average price of
AIG's common stock ending three days prior to closing. This exchange ratio will
provide American General shareholders AIG common stock valued at $46 per
American General share as long as AIG's average price is between $76.20 and
$84.22 during this pricing period. In the event that AIG's price is equal to or
less than $76.20 or equal to or more than $84.22, American General shareholders
will receive 0.6037 or 0.5462 AIG shares, respectively.
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AIG TO ACQUIRE AMERICAN GENERAL
May 11, 2001
Page two
The transaction should be immediately accretive to AIG's earnings
per share. The transaction is subject to various regulatory approvals and other
customary conditions, as well as the approval of American General
shareholders, and is expected to close by year end.
Mr. Greenberg and Mr. Devlin will hold a conference call on Friday, May
11, 2001 at 10:00 AM EDT to discuss the transaction. The telephone number in
the United States is 800/369-2056. International callers should telephone
212/287-1858. The pass code is AIG. Please call 15 minutes in advance to
establish a connection. A rebroadcast of the call can be accessed through May
18, 2001 by dialing 888/568-0443 in the United States and 402/530-7976 outside
the United States.
# # #
AIG is the leading U.S.-based international insurance and financial
services organization and the largest underwriter of commercial and industrial
insurance in the United States. Its member companies write a wide range of
commercial and personal insurance products through a variety of distribution
channels in approximately 130 countries and jurisdictions throughout the world.
AIG's global businesses also include financial services and asset management,
including aircraft leasing, financial products, trading and market making,
consumer finance, institutional, retail, and direct investment fund asset
management, real estate investment management, and retirement savings products.
AIG's common stock is listed on the New York Stock Exchange, as well as the
stock exchanges in London, Paris, Switzerland and Tokyo.
American General is one of the nation's largest diversified financial
services organizations with assets of $124 billion and market capitalization of
$23 billion. Headquartered in Houston, it is a leading provider of retirement
services, investments, life insurance, and consumer loans to more than 12
million customers. American General common stock is listed on the New York,
Pacific, London, and Swiss stock exchanges.
# # #
Caution concerning forward-looking statements:
This press release contains forward-looking statements. These forward-looking
statements are found in various places throughout this press release and
include, without limitation, statements regarding the financial conditions,
results of operations and businesses of AIG and American General, as well as
the consolidation of American General into AIG and the expected timing and
benefits of the acquisition. While these forward-looking statements represent
our judgments and future expectations concerning the development of our
business and the timing and benefits of the acquisition, a number of risks,
uncertainties, and other important factors could cause actual developments and
results to differ materially from our expectations. These factors include, but
are not limited to, those set forth in AIG's 2000 Annual Report on Form 10-K
and American General's 2000 Annual Report on Form 10-K, as well as the failure
of the American General shareholders to approve the transaction; the risk that
American General's business will not be successfully integrated into AIG; the
costs related to the transaction; the inability to obtain or meet conditions
imposed for governmental approvals for the transaction; the risk that
anticipated synergies will not be obtained or not obtained within the time
anticipated; and other key factors that we have indicated could adversely
affect our business and financial performance contained in our past and future
filings and reports, including those filed with the United States Securities
and Exchange Commission (the "SEC").
More detailed information about those factors is set forth in filings made by
AIG and American General with the SEC. Neither AIG nor American General is
under any obligation to (and expressly disclaims any such obligations to)
update or alter its forward-looking statements whether as a result of new
information, future events, or otherwise.
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AIG TO ACQUIRE, AMERICAN GENERAL
May 11, 2001
Page three
Further information about proxy materials:
AIG and American General will be filing a proxy statement/prospectus and other
relevant documents concerning the acquisition with the SEC. INVESTORS ARE URGED
TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THOSE DOCUMENTS WILL
CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain such documents
free of charge at the SEC's website at www.sec.gov. In addition, such documents
may also be obtained free of charge by contacting American International Group,
Inc., 70 Pine Street, New York, New York, 10270, Attention: Director Of Investor
Relations, or American General Corporation, 2929 Allen Parkway, Houston, Texas,
77019, Attention: Investor Relations.
American General and certain other persons referred to below may be deemed to be
participants in the solicitation of proxies from American General shareholders
to adopt the agreement providing for AIG's acquisition of American General. The
participants in this solicitation may include, under SEC rules, the directors
and executive officers of American General, who may have interests in the
transaction, including as a result of holding shares or stock options of
American General. A detailed list of the names and interests of American
General's directors and executive officers is contained in the definitive proxy
statement on Schedule 14A filed by American General with the SEC on March 28,
2001. Copies of that filing may be obtained free of charge at the SEC's website
at www.sec.gov.
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