American National Group (ANAT), an insurance company based in Galveston, has agreed to be acquired by Brookfield Asset Management Reinsurance for $5.1 billion.
The all-cash offer of $190 per share represents a 25% over the weighted average share price for the past 30 days. There were press reports in May that the company was exploring a possible sale. Prior to that, the stock price was around $120 per share.
ANAT was formed in 1905 in Galveston by William Lewis Moody Jr. It has $30 billion in assets, primarily in life insurance, though it has health, property, and casualty products. It operates in all 50 states.
70% of the stock is owned by the Moody Family or The Moody Foundation. The Libbie Shearn Moody Trust, The Moody Foundation and the Moody Medical Research Institute, who collectively own 60% of the shares, have approved the sale.
A lot of the shares of ANAT are owned in trusts of surviving members of the Moody family. Once the beneficiary dies, most of the shares in those trusts will revert back to The Moody Foundation. According to the 2019 financial report of The Moody Foundation, about two-thirds of its investments (direct and indirect) were tied up in its investment in ANAT, so the sale will allow it to diversify its assets.
Following closing, Brookfield Reinsurance intends to maintain American National’s headquarters in Galveston and its presence in League City, as well as its operational hubs in Springfield, Missouri and Albany, New York.
According to the Wall Street Journal there has been a ‘frenzy among investment firms to amass insurance assets in recent months, with Blackstone Group Inc., Apollo Global Management Inc. and KKR & Co. all announcing big transactions’. With low interest rates, insurance companies generate a lot of cash that can be reinvested in other higher yielding investment products.
The deal is expected to close in the first half of 2022.
In April, CFO Tim Walsh was promoted to COO.