Newark, N.J.-Prudential Financial Inc. finalized its acquisition of Northbrook, Ill.-based Allstate Financial's variable annuity business through a reinsurance transaction.Prudential's initial investment in the business, reflecting total consideration to Allstate, related taxes and capital requirements, is approximately $591 million. This amount reflects a price adjustment paid to Allstate for market movements between signing and closing. Over the course of a transition period of up to 24 months from closing, Newark, N.J.-based Prudential will assume the administration of Allstate Financial's in-force variable annuities, with account values of approximately $17 billion (value as of March 31, 2006).
"The acquisition of Allstate Financial's variable annuity business greatly increases our scale and distribution opportunities," said David Odenath, president of Prudential Annuities. "Our priorities in 2006 will be to integrate the business, launch our variable annuity products in Allstate's proprietary channel, and build relationships within Allstate's non-proprietary channel."
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