ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, December 25, 1996 TAG: 9612260030
SECTION: BUSINESS PAGE: B-8 EDITION: HOLIDAY
DATELINE: RICHMOND
SOURCE: Associated Press
American General Corp. said it has agreed to buy Home Beneficial Corp. of Richmond for $665 million, solidifying American General's position as one of the nation's five biggest life insurers.
The transaction, expected to close in late March or early April, is the third in two years for Houston-based American General. It is expected to save the combined company $20 million a year.
American General, with $61.2 billion in assets, will pay $39 a share for Home Beneficial.
Home Beneficial, with $1.4 billion in assets, recently hired Goldman, Sachs & Co. to find a buyer for the company because of the difficulties in the industry.
``You need more size to be competitive today because it's not a very fast-growing industry,'' said R.W. Wiltshire Jr., president and chief executive officer of Home Beneficial. ``American General is obviously very large in size. We feel like this will give our agency personnel more competitive products.''
If American General retains Home Beneficial's 1,000 sales agents, they will be able to sell and service American General products to their policyholders.
Home Beneficial operates two Roanoke Valley sales offices, in Roanoke and Salem, with a total of 45 agents, managers and clerical personnel, according to a company spokeswoman who declined to give her name. "We don't know the dispersement of employees" after the purchase, she said Tuesday.
American General spokesman John Pluhowski did not say whether the company intended to keep all sales agents.
``Right now, our focus is to complete the acquisition,'' he said.
Robert Devlin, president and CEO of American General, said Home Beneficial is the ``perfect strategic fit'' with the company's Nashville-based subsidiary, American General Life and Accident Co.
The two offer similar products targeting families with incomes of $25,000 to $30,000 a year. And they both focus on markets in the Southeast.
The agreement continues a trend toward consolidation in the industry.
``American General is well-positioned to take advantage of the consolidation of the life insurance industry, and we have demonstrated so through our recent acquisitions,'' Pluhowski said.
American General paid $1.2 billion for Springfield, Ill.-based Franklin Life Insurance Co. in January 1995 and $362 million for Jacksonville, Fla.-based Independent Life Insurance Co. in February 1996.
The transaction is subject to the approval of Home Beneficial's stockholders and regulatory authorities. Stockholders may chose to receive either cash or American General common stock.
Home Beneficial's stock, traded on the Nasdaq stock market, closed Tuesday at $38.06 1/4 a share, up 12 1/2 cents from Monday's close.
LENGTH: Medium: 60 lines ILLUSTRATION: GRAPHIC: Charts by staff: 1. American General Corp. 2. Homeby CNBBeneficial. KEYWORDS: MGR