The Allstate Corporation (NYSE:ALL) agreed to acquire National General Holdings Corp. (NasdaqGM:NGHC) from a group of sellers and others for $3.7 billion on July 7, 2020. Under the terms of transaction, National General shareholders will receive $32 per share in cash from Allstate, plus closing dividends expected to be $2.5 per share (special dividend amount), providing $34.5 in total value per share. The merger agreement provides that, at the effective time, each outstanding option to purchase a National General common stock will be canceled for an amount equal to the merger consideration minus the exercise price per company common share underlying such stock option multiplied by the number of common shares underlying such stock option. As of the effective time, each outstanding restricted stock unit (RSU) which was granted prior to the date hereof, regardless of whether vested or unvested, shall be cancelled and, in exchange for an amount in cash equal to the product of merger consideration multiplied by the number of shares of underlying such RSU. Allstate will fund the share purchase by deploying $2.2 billion in combined cash resources and, subject to market conditions, issuing $1.5 billion of new senior debt. Allstate continues to assess the optimal acquisition funding mix, and as a result, the final allocation between cash and senior debt may change. As of November 19, 2020, Allstate is carrying out an offering of Senior Notes in amount of $1.19 billion and intends to use the proceeds for funding the acquisition. Post-acquisition, National General Holdings will operate as a wholly owned subsidiary of The Allstate Corporation. National General Holdings will pay a termination fee of $132.5 million (just under 3.0% of the Company's equity value including preferred stock) to The Allstate.

The transaction is subject to regulatory approvals including insurance regulatory approvals, adoption of the merger agreement by holders of National General Holdings, any waiting period (and any extension thereof) applicable to the merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 shall have expired or been earlier terminated and other customary closing conditions. The merger is not subject to approval by the stockholders of Allstate Corporation or to any financing condition. National General's Board of Directors has unanimously approved the transaction. The Board of Allstate also approved the deal. A voting agreement was entered into with Leah Karfunkel, Barry Karfunkel and Robert Karfunkel who beneficially own in the aggregate approximately 40% of the outstanding shares of National General pursuant to which they have agreed to vote in favor of the transaction. As of September 30, 2020, National General shareholders approved the transaction. The transaction is expected to close in early 2021. As of December 1, 2020, if all insurance regulatory approvals are obtained by the end of December 2020, the parties anticipate the transaction will close on or about January 4, 2021, subject to other customary closing conditions, however, if such insurance regulatory approvals are not obtained by such date, the transaction is expected to close in early 2021. The transaction will be accretive to adjusted net income earnings per share and return on equity beginning in the first year.

Ardea Partners acted as financial advisor and John M. Schwolsky and Howard Block of Willkie Farr & Gallagher LLP acted as legal advisors to The Allstate Corporation. J.P. Morgan Securities LLC acted as financial advisor to The Allstate Corporation. J.P. Morgan Securities LLC acted as financial advisor and Adam M. Givertz, Jean M. McLoughlin, Jeffrey D. Marell, Steve Centa, Christian Kurtz, Scott Sontag, Reuven Falik, Salvatore Gogliormella, Claudine Meredith-Goujon, Andrew Gordon, Steven Herzog, Peter Jaffe, Rachel Fiorill and Marta Kelly of Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to National General Holdings. J.P. Morgan Securities LLC acted as fairness opinion provider to The Allstate Corporation. J.P. Morgan received a fee from National General Holdings of $3 million in connection with the delivery of its opinion. National General Holdings has agreed to pay J.P. Morgan a transaction fee of up to approximately $34 million, against which the opinion fee will be credited, upon the consummation of the transaction. Kingsdale Advisors acted as information agent to National General Holdings and will receive a fee of $12,000 for its services. Melissa Sawyer of Sullivan & Cromwell LLP acted as a legal advisor to J.P. Morgan Securities LLC.

The Allstate Corporation (NYSE:ALL) completed the acquisition of National General Holdings Corp. (NasdaqGM:NGHC) from a group of sellers and others on January 4, 2021.