A.M. Best Comments on Prudential's Acquisition of American Skandia.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--May 1, 2003 Following today's announcement that Prudential Financial, Inc. (Prudential) (Newark, NJ) (NYSE NYSE See: New York Stock Exchange : PRU PRU Prudential Financial PRU Pupil Referral Unit PRU Photographic Reconnaissance Unit PRU Potomac Rugby Union (Washington, DC) PRU Provincial Reconnaissance Unit PRU Projets de Rénovation Urbaine PRU Pruhonice ) has completed its acquisition of American Skandia Life Assurance Corporation (ASLAC ASLAC Advanced Subscriber Line Audio Processing Interface ASLAC Advanced Subscriber Line Audio Controller ) (Shelton, CT), A.M. Best Co. observes that the financial strength ratings of A (Excellent) and the positive rating outlook of The Prudential Insurance Company of America (Newark, NJ) and its wholly owned life/health subsidiaries remain unaffected. Prudential and its subsidiaries' existing debt ratings also remain unaffected. Additionally, the under review status with developing implications on the financial strength rating of A- (Excellent) of American Skandia remains unchanged. Prudential purchased American Skandia, Inc., ASLAC's United States holding company, from Skandia Insurance Company Ltd., a Stockholm-based financial services organization, for total consideration of approximately $1.196 billion. Following discussions with management, A.M. Best notes the company's strategic intentions are to fully integrate American Skandia into Prudential's existing annuity business as a core business line. A.M. Best believes ASLAC should provide a number of strategic and financial benefits, including expense savings, an expanded and growing source of operating profits and broader distribution of Prudential's products by leveraging ASLAC's existing third-party relationships and fee-based sub-advisor investment platform. As a leading seller of variable annuities Variable annuities Investment contracts whose issuer pays a periodic amount linked to the investment performance of an underlying portfolio. in the independent financial planner Financial Planner A qualified investment professional who assists individuals and corporations meet their long-term financial objectives by analyzing the client's status and setting a program to achieve these goals. channel, ASLAC is expected to move Prudential into a top ten position in the variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. marketplace. A.M. Best will determine the acquisition's impact on American Skandia's financial strength rating following further dialogue with management, review of the integration progress, analysis of the transaction structure and funding mechanisms and evaluation of strategic initiatives for this entity. This review is expected to be ongoing over the next several months, with further due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. as deemed appropriate. For a complete listing of Prudential's financial strength and debt ratings, please visit http://www.ambest.com/press/050101prudential.pdf. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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