MetLife Completes Acquisition of American Life Insurance Company
November 01 2010 - 5:01AM
Business Wire
MetLife, Inc. (NYSE: MET) announced today that it has completed
its acquisition of American Life Insurance Company (Alico) from
American International Group, Inc. (AIG) for $16.2 billion.
“With our acquisition of Alico complete, MetLife has become the
premier global life insurance and employee benefits powerhouse,”
said C. Robert Henrikson, chairman, president & chief executive
officer of MetLife, Inc. “For many years, MetLife has held strong,
leadership positions in the U.S., Mexico, Korea and Chile that we
can now build upon with our reach into more than 60 countries
around the globe. This transaction delivers on our global growth
strategies, adding significant scale and reach to MetLife’s
international footprint. It also further diversifies and balances
our geographic mix and product offerings and significantly
increases the company’s distribution power.
“We are well positioned to deliver earnings and return on equity
accretion as a result of this acquisition,” added Henrikson. “Since
announcing this transaction on March 8, 2010, teams from MetLife
and Alico have been working closely together to help ensure that
the combined organization will capture the growth opportunities
before us.”
Consideration paid by MetLife to AIG for the acquisition of
Alico consisted of $7.2 billion in cash consideration after
adjustments and $9.0 billion in MetLife equity and other
securities, subject to closing adjustments. The securities portion
of the purchase price consisted of 78.2 million shares of MetLife
common stock, 6.9 million shares of contingent convertible
preferred stock and 40 million equity units. The values of the
common and preferred stock are based on the closing price of
MetLife’s common stock on October 29, the trading date prior to
closing.
MetLife, Inc. is a leading global provider of insurance,
annuities and employee benefit programs, serving 90 million
customers in over 60 countries. Through its subsidiaries and
affiliates, MetLife holds leading market positions in the United
States, Japan, Latin America, Asia Pacific, Europe and the Middle
East. For more information, visit www.metlife.com.
This press release may contain or incorporate by reference
information that includes or is based upon forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements give expectations or
forecasts of future events. These statements can be identified by
the fact that they do not relate strictly to historical or current
facts. They use words such as “anticipate,” “estimate,” “expect,”
“project,” “intend,” “plan,” “believe” and other words and terms of
similar meaning in connection with a discussion of future operating
or financial performance. In particular, these include statements
relating to future actions, prospective services or products,
future performance or results of current and anticipated services
or products, sales efforts, expenses, the outcome of contingencies
such as legal proceedings, trends in operations and financial
results.
Any or all forward-looking statements may turn out to be wrong.
They can be affected by inaccurate assumptions or by known or
unknown risks and uncertainties. Many such factors will be
important in determining MetLife’s actual future results. These
statements are based on current expectations and the current
economic environment. They involve a number of risks and
uncertainties that are difficult to predict. These statements are
not guarantees of future performance. Actual results could differ
materially from those expressed or implied in the forward-looking
statements. Risks, uncertainties, and other factors that might
cause such differences include the risks, uncertainties and other
factors identified in MetLife, Inc.’s filings with the
U.S. Securities and Exchange Commission (the “SEC”). These
factors include: (1) the imposition of onerous conditions following
the acquisition of American Life Insurance Company (“ALICO”), a
subsidiary of ALICO Holdings LLC (“ALICO Holdings”) and Delaware
American Life Insurance Company (“DelAm”) (collectively, the
“Acquisition”); (2) difficulties in integrating the business
acquired in the Acquisition (the “Alico Business”);
(3) uncertainty with respect to the outcome of the closing
agreement entered into between ALICO and the United States Internal
Revenue Service in connection with the Acquisition;
(4) uncertainty with respect to the making of elections under
Section 338 of the U.S. Internal Revenue Code of 1986, as
amended, and any benefits therefrom; (5) an inability to
manage the growth of the Alico Business; (6) a writedown of
the goodwill established in connection with the Acquisition;
(7) exchange rate fluctuations; (8) an inability to
predict the financial impact of the Acquisition on MetLife’s
business and financial results; (9) events relating to
American International Group, Inc. (“AIG”) that could adversely
affect the Alico Business or MetLife; (10) the dilutive impact
on MetLife, Inc.’s stockholders resulting from the issuance of
equity securities to ALICO Holdings in connection with the
Acquisition; (11) a decrease in MetLife, Inc.’s stock price as
a result of ALICO Holdings’ ability to sell its equity securities;
(12) the conditional payment obligation of approximately
$300 million to ALICO Holdings if the conversion of the
Series B Contingent Convertible Junior Participating
Non-Cumulative Perpetual Preferred Stock (“Series B Preferred
Stock”) issued to ALICO Holdings in connection with the Acquisition
into MetLife, Inc.’s common stock is not approved; (13) change
of control provisions in the Alico Business’ agreements;
(14) effects of guarantees within certain of the Alico
Business’ variable life and annuity products; (15) regulatory
action in the financial services industry affecting the combined
business; (16) financial instability in Europe and possible
writedowns of sovereign debt of European nations;
(17) difficult conditions in the global capital markets;
(18) increased volatility and disruption of the capital and
credit markets, which may affect MetLife’s ability to seek
financing or access its credit facilities; (19) uncertainty
about the effectiveness of the U.S. government’s programs to
stabilize the financial system, the imposition of fees relating
thereto, or the promulgation of additional regulations;
(20) impact of comprehensive financial services regulation
reform on MetLife; (21) exposure to financial and capital
market risk; (22) changes in general economic conditions,
including the performance of financial markets and interest rates,
which may affect MetLife’s ability to raise capital, generate fee
income and market-related revenue and finance statutory reserve
requirements and may require MetLife to pledge collateral or make
payments related to declines in value of specified assets;
(23) potential liquidity and other risks resulting from
MetLife’s participation in a securities lending program and other
transactions; (24) investment losses and defaults, and changes
to investment valuations; (25) impairments of goodwill and
realized losses or market value impairments to illiquid assets;
(26) defaults on MetLife’s mortgage loans; (27) the
impairment of other financial institutions; (28) MetLife’s
ability to address unforeseen liabilities, asset impairments, or
rating actions arising from any future acquisitions or
dispositions, and to successfully integrate acquired businesses
with minimal disruption; (29) economic, political, currency
and other risks relating to MetLife’s international operations;
(30) MetLife, Inc.’s primary reliance, as a holding company,
on dividends from its subsidiaries to meet debt payment obligations
and the applicable regulatory restrictions on the ability of the
subsidiaries to pay such dividends; (31) downgrades in
MetLife, Inc.’s and its affiliates’ claims paying ability,
financial strength or credit ratings; (32) ineffectiveness of
risk management policies and procedures; (33) availability and
effectiveness of reinsurance or indemnification arrangements, as
well as default or failure of counterparties to perform;
(34) discrepancies between actual claims experience and
assumptions used in setting prices for MetLife’s products and
establishing the liabilities for MetLife’s obligations for future
policy benefits and claims; (35) catastrophe losses;
(36) heightened competition, including with respect to
pricing, entry of new competitors, consolidation of distributors,
the development of new products by new and existing competitors,
distribution of amounts available under U.S. government
programs, and for personnel; (37) unanticipated changes in
industry trends; (38) changes in accounting standards,
practices and/or policies; (39) changes in assumptions related
to deferred policy acquisition costs (“DAC”), deferred sales
inducements (“DSI”), value of business acquired (“VOBA”) or
goodwill; (40) increased expenses relating to pension and
postretirement benefit plans, as well as health care and other
employee benefits; (41) exposure to losses related to variable
annuity guarantee benefits, including from significant and
sustained downturns or extreme volatility in equity markets,
reduced interest rates, unanticipated policyholder behavior,
mortality or longevity, and the adjustment for nonperformance risk;
(42) deterioration in the experience of the “closed block”
established in connection with the reorganization of MLIC;
(43) adverse results or other consequences from litigation,
arbitration or regulatory investigations; (44) discrepancies
between actual experience and assumptions used in establishing
liabilities related to other contingencies or obligations;
(45) regulatory, legislative or tax changes relating to
MetLife’s insurance, banking, international, or other operations
that may affect the cost of, or demand for, MetLife’s products or
services, impair its ability to attract and retain talented and
experienced management and other employees, or increase the cost or
administrative burdens of providing benefits to employees;
(46) the effects of business disruption or economic
contraction due to terrorism, other hostilities, or natural
catastrophes; (47) the effectiveness of MetLife’s programs and
practices in avoiding giving its associates incentives to take
excessive risks; (48) other risks and uncertainties described
from time to time in MetLife, Inc.’s filings with the SEC; and
(49) any of the foregoing factors as they relate to the Alico
Business and its operations.
MetLife, Inc. does not undertake any obligation to publicly
correct or update any forward-looking statement if MetLife, Inc.
later becomes aware that such statement is not likely to be
achieved. Please consult any further disclosures MetLife, Inc.
makes on related subjects in reports to the SEC.
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