2. 外语
  3. The Acquisition of Two Companies The Provident Companies, the No. 2 seller of individual disability insurance policies, agreed y

The Acquisition of Two Companies The Provident Companies, the No. 2 seller of individual disability insurance policies, agreed y

admin2009-06-15  36
问题 The Acquisition of Two Companies
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.
选项 A、No. 1 insurer acquired the No. 2 insurer.
B、No.2 insurer acquired the No. 1 insurer.
C、This deal provided 600 more job opportunities.
D、This deal would produce 1/3 more market share.
答案B
解析 可在第一段直接找到答案。
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