By Lisa Kerner
Charlotte, N.C., Nov. 7 - Fidelity National Financial, Inc. agreed to acquire LandAmerica Financial Group, Inc., it was announced on Friday.
Under the companies' definitive merger agreement, LandAmerica shareholders will receive 0.993 shares of Fidelity National common stock for each share of LandAmerica common stock.
"The unprecedented credit freeze and depressed real estate market have negatively impacted our business to the point that it has become increasingly difficult for LandAmerica to remain an independent public company," LandAmerica chairman and chief executive officer Theodore L. Chandler said in a company news release.
Chandler will join the Fidelity National board of directors as vice chairman once the merger is complete.
The deal is designed to reduce the combined debt of the two companies by approximately $250 million prior to the merger's close, according to the release.
Fidelity National subsidiary Chicago Title Insurance Co. agreed to provide a $30 million standby secured credit facility as a means of potential additional liquidity for LandAmerica in connection with the merger agreement, the release said.
LandAmerica said the transaction is conditioned upon shareholder approval, its divestiture of Centennial Bank, regulatory approvals and other customary closing conditions.
"Our preliminary estimate, which must be confirmed during our due diligence period, is that we will realize at least $150 million in operational cost synergies throughout the combined operations, including the areas of corporate and administrative overhead, direct and agency operations and claims management and processing," Fidelity National chairman William P. Foley II said in the release.
Fidelity National is a Jacksonville, Fla., title and specialty insurance company.
LandAmerica is a title insurance underwriter based in Glen Allen, Va.
| Acquirer: | Fidelity National Financial, Inc.
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| Target: | LandAmerica Financial Group, Inc.
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| Announcement date: | Nov. 7
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| Price per share: | 0.993 shares of Fidelity National common stock
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| Expected closing: | Upon approvals
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| Stock price for acquirer: | NYSE: FNF: $8.35 on Nov. 6
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| Stock price for target: | NYSE: LFG: $4.75 on Nov. 6
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