SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
---------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 9, 1999
The Allstate Corporation
(Exact Name of Registrant as Specified in Charter)
Delaware 1-11840 36-3871531
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification
Incorporation) Number)
2775 Sanders Road, Northbrook, Illinois 60062
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (847) 402-5000
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Exhibit Index at page 4
Item 5. Other Events
On July 9, 1999, the Registrant issued the press release attached hereto as
Exhibit 99.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Description
99 Registrant's press release dated
July 9, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
THE ALLSTATE CORPORATION
By s\ Robert W. Pike
Name: Robert W. Pike
Title: Vice President, Secretary
and General Counsel
July 9, 1999
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Index to Exhibits
Sequential
Page
Number Description Number
99 Registrant's press release dated 5
July 9, 1999
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Exhibit No. 99
The Allstate Corporation
News
FOR MORE INFORMATION:
April Hattori
Allstate Media Relations
847-402-8373
For Immediate Release
ALLSTATE ENTERS FAST GROWING INSURANCE WORKSITE MARKETING ARENA WITH ACQUISITION
OF AMERICAN HERITAGE LIFE INVESTMENT CORP.
(NORTHBROOK, IL) July 9, 1999 - As part of its strategy to expand into
additional channels with additional products and brands, The Allstate
Corporation (NYSE:ALL) announced today it has reached a definitive agreement to
acquire American Heritage Life Investment Corp. (NYSE:AHL) for a total
consideration of $1.1 billion. The Boards of both Allstate and American Heritage
Life Investment Corp (AHLIC) have approved the transaction.
This transaction -- which closely follows the acquisition of CNA Personal Lines
and a strategic alliance with Putnam Investments to market variable annuities --
will further broaden and strengthen Allstate's multi-channel, multi-product,
multi-brand strategy.
AHLIC is the parent of American Heritage Life Insurance Company, the third
largest distributor of life, disability and health insurance to employees at
their workplace. Last year, it had revenues of $480 million, and recorded an
operating profit of $36.4 million.
"The acquisition of AHLIC provides us with the opportunity to expand into a
rapidly growing segment of the life insurance business through a highly regarded
name and channel, and with a management team which has a proven and successful
track record in this market," said Allstate Chairman, President and CEO Edward
M. Liddy.
"American Heritage Life is already the third-largest work-site marketer, and we
believe the business can be expanded significantly. By adding Allstate's
significant capital and national presence, we fully expect to leverage the power
of our two companies," Liddy said.
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"This company has shown solid and profitable growth for 23 consecutive years,"
said AHLIC Chairman T. O'Neal Douglas. "However, it was clear that we could best
capture the rapidly expanding growth opportunities in the marketplace with a
partner. We see Allstate as having the capital, the marketing support and the
distribution expertise to help us meet the opportunities this expanding market
provides, and enable us to expand our market presence across the country."
The existing management of American Heritage Life will continue to run the
business under the present brand name and the headquarters will remain in
Jacksonville, Florida. American Heritage Life is licensed to conduct business in
49 states, the District of Columbia and Puerto Rico. It focuses primarily on the
sale of products to workers with moderate to middle incomes in companies with
fewer than 1,000 employees. These smaller companies employ some 87 percent of
the American workforce.
"To date, the majority of American Heritage Life's products have been marketed
in the Southeastern United States," said Thomas J. Wilson, president of Allstate
Life Insurance. "There is a significant opportunity to use Allstate's national
presence to expand the business throughout the country. This, coupled with a
market that is growing 15 percent annually as employees increasingly decide to
purchase products through their workplace, clearly offers an unprecedented
growth opportunity."
American Heritage Life Investment Corp. shareholders will receive $32.25 for
each AHLIC share, receivable in Allstate shares or cash. In addition, Allstate
will assume AHLIC's obligations under its outstanding mandatorily redeeemable
preferred securities. The transaction values AHLIC at $1.1 billion and is
subject to approval by the company's shareholders, requisite regulatory
authorities and other customary conditions. It is expected to be completed by
the end of the year.
As part of today's agreement, shareholders owning approximately 39 percent of
the outstanding AHLIC common stock signed an agreement to vote all of their
shares in favor of the acquisition. In addition, they agreed to vote against any
other proposed acquisition from a third party for six months. AHLIC also granted
to Allstate an option to acquire up to 19.9 percent of newly issued shares of
American Heritage Life Investment Corp., exercisable in certain circumstances
involving a third party's interference with the transaction. The parties entered
into the option to increase the likelihood that the transaction would be
completed according to the terms of the definitive agreement.
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Allstate intends to repurchase in the open market a number of shares equal to
those issued in the proposed acquisition. It is anticipated that a substantial
portion of the repurchase will be completed prior to the closing of the
acquisition. Further, it is expected that these repurchases will be in addition
to those authorized under Allstate's existing $2 billion repurchase program. As
of June 30, 1999, Allstate had repurchased $820 million worth of shares under
the existing authorization.
Allstate expects the transaction to have a minimally dilutive effect for the
first two years following closing.
The Allstate Corporation is the nation's largest publicly held personal lines
insurance company. Its main business units include Allstate Personal Property
and Casualty, which provides insurance for more than 14 million households and
has approximately 15,500 agents in the U.S. and Canada, and Allstate Life and
Savings, which markets a number of life insurance and savings products under a
variety of brands through a number of channels and is currently the nation's
12th largest life insurance business.
This news release shall not constitute an offer to sell, or the solicitation of
any offer to buy, any security in any jurisdiction in which an offer,
solicitation or sale would be unlawful.
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