Many Texas residents know that a merger is generally when a firm assumes all the assets and liabilities of another company. In some circumstances, the acquiring business retains its identity, while the acquired firm ceases to exist. However, there are many different types of merging strategies, and a company can acquire another business in various formations.
In recent news, another merger has occurred, this time between two prominent insurance companies. In this particular case, the merger will not extinguish the identity of the acquired company. In this process, both companies will continue to exist; however, one will be a subsidiary of the other.
According to reports, Alleghany Corporation and Transatlantic Holdings, Inc. have recently announced that their merger is finalized. Sources explain that the collaboration will create an enormous insurance and reinsurance franchise. In this type of merger, Transatlantic will serve as an operating subsidiary of Alleghany.
Under the merger agreement, Transatlantic stockholders may receive shares of Alleghany common stock for each share of common stock. On the other hand, a holder has the option of receiving cash with a value equal to $61.14.
Sources report that the Alleghany Board would add former Transatlantic directors. The current Transatlantic President and CEO will continue with the company.
Mergers can be extremely intricate. Companies considering major business transactions should take the time to explore the available merging and acquiring options. Hopefully, everything will work out for the uniting insurance companies. Nevertheless, Alleghany and Transatlantic will join, thus improving the span of their distribution.
Source: NASDAQ, "Alleghany, Transatlantic Holdings announces completion of merger," Mar. 6, 2012