Insurer Conseco Inc. stunned GE Capital Corp. Thursday by outbidding it with a $3.2 billion purchase offer for Kemper Corp., a deal that would represent one of the largest insurance mergers ever.
The $67 a share offer from Conseco compares with GE Capital's longstanding $60 a share offer, worth $2.4 billion, and could mark the start of a takeover brawl for Kemper, a large money management and insurance company in Chicago that has been seeking other offers.The Conseco bid also comes at a time when GE Capital's parent General Electric Co. is preoccupied with problems in its Kidder Peabody investment banking brokerage, where a bond trading scandal resulted in a top management reshuffle on Tuesday.
A combined Conseco-Kemper would create a life insurance giant with $85 billion of assets under management, $4.2 billion in revenue and 9,000 employees.
If the deal goes through, it would be the largest insurance company merger in memory, said analysts.
For Conseco, the acquisition would mean a major thrust into the mutual fund, money management and brokerage businesses. Kemper is the seventh-largest mutual fund company, with 31 funds and $45.8 billion assets under management.
The company, based in Long Grove, Ill., also runs a full service stock and bond brokerage. Kemper is the tenth-largest life insurance company.
Conseco is primarily a life and health insuranc company, with $19 billion in assets. The company, based in Carmel, Ind., performs money management services for its own investment portfolio and the portfolios of other insurance companies.