Prudential PLC of London announced last week that it plans to buy American General Corporation of Houston for $22.3 billion.

Prudential's and American General's boards of directors have approved the merger. Shareholder and regulatory approvals are still required. The companies plan to complete the deal in the third quarter of 2001, according to Prudential.

Prudential, which is not related to U.S. life insurer Prudential Insurance Company of America, is one of Europe's largest life insurance and pension annuity providers, according to Prudential. American General is a leading provider of annuities, mutual funds, life insurance and consumer loans in the U.S., according to Prudential.

If the deal is completed, Prudential would own 50.5 percent of the merged group that would have a market value in excess of $45 billion, about $336 billion in assets under management and premium income of about $4.8 billion, Prudential announced. Prudential's U.S. operations, Jackson National Life and PPM American would be integrated with American General's operations, according to Prudential.

Under the agreement, Robert M. Devlin, chairman and CEO of American General, would be named deputy chairman and CEO of Prudential's North American operations, according to Prudential. The company resulting from the merger will be based in London and New York.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.