American Bankers (ABI), based in Miami, sells credit-related insurance programs to banks, credit card companies, retailers and consumer-finance companies.
Fortis, which said it's paying a 19 percent premium to the closing price of ABI's shares on Friday, also said it's assuming $194 million of outstanding debt of ABI. The Netherlands company also said the purchase will enhance its overall earnings growth rate.
Fortis said the purchase will increase the number of channels for marketing its credit insurance products.
"It will broaden product lines, enhance cross-selling opportunities, and promote the application of database marketing capabilities to a broader range of customers," said Allen Freedman, chief executive of Fortis Inc., the U.S. holding company.
This follows on the heels of another recent European takeover of a U.S. financial group. Recently the Netherlands-based Aegon NV (AEG) said it was buying Transamerica Corp. (TA) for $9.7 billion.
Fortis will combine ABI with its own Atlanta-based credit-insurance group, American Security Group.
This is not the first time that ABI has been the target of a takeover bid. In late 1997, American International Group Inc. (AIG) agreed to buy the company for $47 a share, but was broken up by Cendant in early 1998. After a brief bidding war with AIG, Cendant (CD) said it would pay $67 a share, but the agreement then collapsed and Cendant paid ABI a break-up fee.
Written By Suzanne Miller, CBS MarketWatch