Ameriprise Financial has signed a definitive agreement with a subsidiary of Madison, Wisconsin-based American Family Insurance Mutual Holding Company for the sale of Ameriprise Auto & Home (“AAH”), a business unit of Ameriprise Financial based in De Pere, Wisconsin.
Ameriprise will receive gross proceeds of $1.05 billion in cash.
After a payment to an affinity partner, the net proceeds are approximately $950 million, subject to certain post-closing financial adjustments.
In a statement, Ameriprise said that both companies are committed to executing a smooth transition for partners, policyholders, employees, and other stakeholders, and that current AAH customers will retain their policies with no change in coverage or service.
Ameriprise said that it made the decision to pursue a sale following a previously disclosed strategic review of the AAH business and the company determined that now is an appropriate time to exit this business. It said that the sale is consistent with its strategic focus on its core growth areas of advice and wealth management and asset management.
“We are proud of the exceptional value and award-winning service we've provided to auto and home policyholders over the last several decades and we sincerely thank each and every employee for their dedication and contributions,” said Jim Cracchiolo, chairman and chief executive officer of Ameriprise Financial. “This transaction is consistent with our strategy to grow our less capital-intensive businesses and is expected to reduce our risk profile and increase capital flexibility. Given American Family's financial strength and reputation for quality products and customer care, we are pleased to reach this agreement and feel confident that we will be leaving the business in good stead.”
According to Ameriprise, the Ameriprise auto and home legal entities are being sold and there will be no contingent liability associated with this transaction for Ameriprise Financial except for certain post-closing financial adjustments and customary indemnification obligations in a transaction of this type. The transaction is subject to customary conditions and regulatory approvals and is expected to close in the second half of 2019.
Learn more: ameriprise.com; www.amfam.com.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].