American Financial Group has wrapped up the sale of its annuity businesses to MassMutual, including Great American Life Insurance Company and its two insurance subsidiaries, Annuity Investors Life Insurance Company and Manhattan National Life Insurance Company.
The company has also offloaded broker-dealer affiliate, Great American Advisors, Inc., and insurance distributor, AAG Insurance Agency.
Total after-tax cash proceeds from the sale are approximately $3.5 billion.
In connection with the closing of this transaction, the company has declared a special, one-time cash dividend of $14.00 per share of American Financial Group Common Stock.
The dividend is payable on June 15, 2021 to holders of record on June 8, 2021. The aggregate amount of the payment to be made in connection with this special dividend will be approximately $1.2 billion.
This special dividend is in addition to the company’s regular quarterly cash dividend of $0.50 per share that was last paid on April 26, 2021.
In addition, on May 19, 2021, the company’s board authorised the repurchase of up to an additional 5,000,000 shares of the Company’s outstanding common stock through December 31, 2025.
“The disposition of our annuity business sharpens our focus exclusively on the Specialty P&C market and generates substantial excess capital for AFG,” said Co-CEOs Carl H. Lindner III and S. Craig Lindner.
“Returning excess capital to shareholders in the form of this $14.00 special dividend is a key component of AFG’s capital management strategy; it reflects our strong financial position and our confidence in the Company’s financial future.
“Our excess capital remains at a significant level, which affords us the financial flexibility to make opportunistic repurchases, pay additional dividends, grow our Specialty P&C business organically and through acquisitions and start-ups that meet our target return thresholds.”
“We are excited to welcome Great American Life to MassMutual and to help build on its outstanding leadership position in the annuity market,” said Roger Crandall, Chairman, President and CEO, MassMutual.
“This acquisition immediately broadens our product offerings, further diversifies our distribution capabilities, and generates additional earnings – enabling us to help even more people secure their future and protect the ones they love.”