Prudential in £18bn takeover

Prudential has taken over a US financial services company in a £18b deal.

The life assurer says the acquisition of Houston-based American General will create a "top-tier" international financial services business, with leading positions in the US, the UK and Asia.

The company will integrate its US operations, Jackson National Life and PPM America, into the American General business.

Prudential shareholders will own 50.5% of the combined group. Chairman Sir Roger Hurn will continue as group chairman, while Jonathan Bloomer will continue as group chief executive.

American General's chairman and chief executive Robert Devlin will join Prudential's board as deputy chairman. He will run the combined group's North American operations.

Prudential says the combined Prudential, American General group will have a market capitalisation of £30.8b, making it the sixth-largest international insurance business and the 11th largest company in the FTSE 100-Index on the London Stock Exchange.

The combined group's operating profits, before goodwill, would have been £1.9 billion for the 12 months to December 31. The total new business written during the year would have been £3.2b.

American General's business is primarily focused on asset accumulation, life insurance and consumer lending, mainly in its domestic US market.

The move will strengthen Prudential's Jackson National Life business, which has been suffering from high policy surrenders.

Prudential says American General and Jackson National Life have complementary product offerings but there are few overlaps between the two businesses' distribution networks.