(March 12) – “Prudential, the UK insurer, on Monday strengthened its position as a global operator, announcing it would acquire American General for about $26.5bn, in an all-share deal which makes the Pru one of the biggest US life companies and creates the world’s sixth-largest insurer,” writes Jane Croft in today’s Financial Times.

“The move is a significant step up for Prudential. While it already had a fast growing Asian business and established operations in the US, this deal gives it increased scale in the fast-growing US life and pensions market.”

“Shares in Prudential, however, fell by 14 per cent on Monday to 768p because of investors’ concerns about the near 30 per cent premium being paid for American General at a time when the US economy is slowing.”

“The enlarged company will be 50.5 per cent owned by shareholders of Prudential, which will integrate its existing US operations, Jackson National Life and PPM America, into American General.”

“Jonathan Bloomer, chief executive of Prudential, will be group chief executive of the enlarged company, to be called Prudential, which will keep its primary listing in London and have a pro forma market capitalisation of about £30.8bn ($45.3bn).”

“Robert Devlin, chief executive of American General, will join the Prudential board as deputy chairman and chief executive of North American operations, reporting to Mr Bloomer.”

“Prudential has agreed to exchange 3.662 shares for each American General share, implying a value of $49.52 per American General share and a total fully diluted equity value of £18.1bn.”

“Mr Bloomer said that the deal would mean that Prudential was in the top three insurers in its key markets of the US, Asia and the UK.”