The "Farmers Insurance News-Alert" website is dedicated to providing the consumer and general public with detailed information concerning the Farmers Insurance Group. This includes fraud reports, consumer complaints, lawsuit's and other legal actions taken against this company. All information contained herein is for educational purposes only. Original sources, when known are sited.
|FARMERS INSURANCE AGREES TO $5.2 BILLION BATUS TAKEOVER
Published: Thursday, August 25, 1988
Farmers Insurance Group Inc. of Los Angeles and Batus Inc. ended a bitter eight-month takeover battle late Wednesday when Farmers agreed to be bought by the tobacco and retailing company for $5.2 billion in cash.
The $75-a-share merger agreement would give B.A.T Industries PLC, the British parent of Louisville-based Batus, a foothold in the U.S. financial services industry.
The chairmen of the companies announced the merger late Wednesday for $3 a share more than Batus` last publicly announced bid.
The two sides began to discuss a friendly buyout late last week, when Batus offered $72 per share, up $9 from its previous top offer.
Stock of Farmers, the nation`s third largest auto and home insurer and seventh largest property and casualty insurer, dipped 50 cents, to $69.25 a share, in over-the-counter trading Wednesday. The agreement was announced hours after the market closed.
Farmers has 68.4 million common shares outstanding.
``In reaching its unanimous decision, Farmers` board of directors considered the concerns regarding this combination, which have been raised during regulatory hearings, and has been satisfied that these concerns will be adequately addressed in the merger of the two companies,`` said Leo E. Denlea Jr., chairman and chief executive of Farmers Group Inc.
Batus promised that Farmers operations would continue essentially unchanged under the new ownership, and Farmers said it would drop its fierce resistance to Batus in hearings before state insurance regulators.
In a joint announcement, the company said Batus; Farmers; and Farmers Insurance Exchange, Fire Insurance Exchange and Truck Insurance Exchange, the reciprocal insurance exchanges managed by Farmers, have agreed to provisions that would assure that the exchanges and their policyholders would not be hurt by the merger.
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