UPDATE: American Financial Group Announces Agreement to Sell Medicare Supplement and Critical Illness Businesses
American Financial Group, Inc. (NYSE: AFG) announced today that it reached a definitive agreement to sell its Medicare Supplement and Critical Illness businesses (headquartered in Austin, Texas and doing business as Great American Supplemental Benefits Group) to Cigna Corporation (NYSE: CI) for approximately $295 million in cash, subject to post-closing adjustments based upon statutory capital and surplus of transferred businesses as of the closing date. AFG expects to realize an after tax gain of approximately $95-$105 million on the sale, which is expected to close late in the third quarter or early in the fourth quarter of 2012.
On a GAAP basis, these businesses contributed approximately $400 million of assets, $325 million of revenues and $34 million of pretax operating earnings to AFG's results in 2011, and $80 million of revenues and $6 million of pretax operating earnings in the first quarter of 2012. Accordingly, AFG expects this transaction to be slightly dilutive to earnings in the short term.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.