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STI TO ACQUIRE GREAT AMERICAN LIFE INSURANCE COMPANY FOR $470 MILLION

STI TO ACQUIRE GREAT AMERICAN LIFE INSURANCE COMPANY FOR $470 MILLION
 STAMFORD, Conn., and CINCINNATI, Sept. 15 /PRNewswire/ -- STI Group, Inc. (NYSE: SPG) and American Financial Corporation (AFC) jointly announced today that STI has entered into a definitive agreement to acquire Great American Life Insurance Company from Great American Insurance Company (GAIC), a wholly owned subsidiary of AFC, for $470 million, subject to adjustment.
 In connection with the acquisition, GAIC has agreed to commence a cash tender offer on or before Oct. 15, 1992 for up to 5,140,973 shares of STI common stock at not less than $7.25 per share. The offer is expected to be kept open until all conditions to the transactions are satisfied.
 GAIC has also agreed to purchase from STI at a price of $6.50 per share such number of shares of STI common stock as is necessary for AFC and its subsidiaries to own, including shares purchased pursuant to the tender offer, approximately 80 percent of STI's outstanding shares. As part of the transaction, GAIC will also purchase from STI $45 million of a newly designated series of STI preferred stock with a 7 percent dividend rate.
 Great American Life Insurance Company, with approximately $4.3 billion in assets, is engaged principally in the sale of qualified tax- sheltered annuities to school teachers through payroll deduction programs. It is licensed to write insurance in 48 states and is rated "A+" by A.M. Best.
 The transactions were approved by the board of directors of STI following the unanimous recommendation of a special committee, which was formed in June when the proposed transactions were publicly announced. The special committee's recommendation was based in part on the opinion of Bear, Stearns & Co., Inc., its financial advisor, that the transactions, taken as a whole, are fair to the stockholders of STI (other than AFC and its affiliates) from a financial point of view.
 The transactions are subject to a number of conditions including, among others, approval by STI's stockholders, approvals by the Ohio and California insurance departments and receipt by STI of funds sufficient to consummate the acquisition and to pay related fees and expenses. Consummation of the transactions is anticipated to occur by the end of 1992, subject to the timely satisfaction of the conditions to the transactions.
 The acquisition will be financed from $156 million of proceeds expected to be received by STI from the sale of preferred and common shares to GAIC, STI's existing cash resources and $225 million in bank financing. STI expects to conclude negotiations and to receive commitment letters from a bank group prior to Sept. 30, 1992.
 -0- 9/15/92 R
 /CONTACT: R. Kevin Matz, assistant treasurer of STI Group, Inc., 203-964-8628/
 (SPG) CO: STI Group, Inc.; American Financial Corp. ST: Connecticut, Ohio IN: INS SU: TNM


KD-OS -- NY022 -- 9580 09/15/92 11:18 EDT
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Publication:PR Newswire
Date:Sep 15, 1992
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