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{{B}}第一篇{{/B}}
{{B}}The Acquisition of Two Companies{{/B}}
The Provident Companies, the No. 2 seller of individual disability
insurance policies, agreed yesterday to buy the No. 1 insurer in the field in a
deal that would give it more than 1/3 of the market.
The $1.2
billion deal would eliminate about 600 jobs, give a big Swiss money-losing
policies sold by the insurer that is being acquired, the Paul Revere
company.
Last year Provident's insurance units had $2.6 billion
in premium revenues and Paul Revere had $1.5 billion. About 57 percent of the
combined $4.1 billion in premiums came from disability policies that were sold
to individuals. Provident's next largest competitor, the UNUM Corporation, has
about 10 percent of the market.
Paul Revere has been controlled
since 1985 by Textron Inc. Textron acquired the insurer when it bought Avco
Financial Services, which makes high interest rate loans to people whose
employment and credit histories make them too risky for bank loans.
James F. Hardymon, Textron's chairman and chief executive, said the sale
"reinforces Textron's strategy to focus on its core manufacturing and finance
businesses." He said, that up to half the income might be used to pay down the
company's more than $10 billion of debt or to buy back stock. Paul Revere's
remaining public shareholders will get $26 in cash for each share, Provident
stock worth $26, or $20 in cash and Provident stock worth $6.
To
finance the deal, Provident is getting a $300 million infusion of cash from the
Zurich insurance Group of Switzerland, which is buying a 15.2% stake in
Provident under an agreement allowing it to increase the stake to 40%.
Provident, which is based in Chattanooga, Tenn., announced a $423 million
write-off on individual disability policies in December 1993. Paul Revere, which
is based in Worchester, Mass., has not taken a similar write-off, said John M.
Hanon, an analyst at Derby Securities.
Provident, Paul Revere
and other companies have previously said that they had to pay claims on diseases
not even known when the policies were written and that many disability claims
resulted in larger than expected benefits payment.
The deal drew
mixed responses from insurance ratings agencies, which had ranked both companies
in the upper grades, indicating a strong likelihood that they would be able over
the long haul to pay claims.