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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 1, 2001
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Alleghany Corporation
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-9371 51-0283071
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(Commission File Number) (IRS Employer Identification Number)
375 Park Avenue, Suite 3201
New York, New York 10152
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 752-1356
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Item 2. Acquisition or Disposition of Assets.
On February 1, 2001, Alleghany Corporation ("Alleghany") completed the
merger of its wholly-owned subsidiary Alleghany Asset Management, Inc. ("AAM")
with a wholly-owned subsidiary of ABN AMRO North America Holding Company ("ABN
AMRO") pursuant to an Agreement and Plan of Merger dated as of October 18, 2000,
as amended by an Amendment to the Agreement and Plan of Merger dated as of
January 17, 2001, and a Closing Agreement dated as of February 1, 2001, by and
among ABN AMRO, AAM and Alleghany (collectively, the "Merger Agreement").
Alleghany received $825 million in cash proceeds, subject to a post-closing
adjustment based upon AAM's stockholder's equity as provided by the terms of the
Merger Agreement.
Item 7. Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
The following unaudited pro forma financial information is attached as
Annex A hereto:
(i) Alleghany Corporation Unaudited Pro Forma Consolidated Balance
Sheet as of September 30, 2000.
(ii) Alleghany Corporation Unaudited Pro Forma Consolidated Statement
of Earnings for the nine months ended September 30, 2000.
(iii) Alleghany Corporation Unaudited Pro Forma Consolidated Statement
of Earnings for the year ended December 31, 1999.
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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The unaudited pro forma consolidated balance sheet at September 30,
2000 included in Annex A attached hereto gives effect to the merger of AAM with
a wholly-owned subsidiary of ABN AMRO as if the merger had occurred at September
30, 2000, and the unaudited pro forma consolidated statements of earnings for
the nine months ending on September 30, 2000 and for the year ended December 31,
1999 included in Annex A attached hereto give effect to such merger as if it had
occurred on January 1, 1999. The unaudited pro forma results do not reflect the
after-tax gain on the transaction of approximately $473 million. Unaudited pro
forma financial information does not purport to be indicative of either the
results of future operations or the results of operations that would have
occurred had the transaction been consummated on the dates indicated.
The unaudited pro forma financial statements included in Annex A
attached hereto should be read in conjunction with Alleghany's historical
consolidated financial statements and notes thereto previously filed in
Alleghany's Annual Report on Form 10-K for the year ended December 31, 1999 and
the Quarterly Reports on Form 10-Q for the periods ended March 31, June 30 and
September 30, 2000.
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(c) Exhibits. The following are filed or incorporated by reference as
exhibits to this report:
Exhibit Number Exhibit Description
2.1 Agreement and Plan of
Merger dated as of
October 18, 2000, by
and among ABN AMRO
North America Holding
Company, Alleghany
Asset Management, Inc.
and Alleghany
Corporation, filed as
Exhibit 2.1 to
Alleghany's Current
Report on Form 8-K for
October 18, 2000, is
incorporated herein by
reference.
2.2 Amendment to the
Agreement and Plan of
Merger dated as of
January 17, 2001, by
and among ABN AMRO
North America Holding
Company, Alleghany
Asset Management, Inc.
and Alleghany
Corporation. Alleghany
Corporation agrees to
furnish supplementally
a copy of any omitted
exhibit or schedule to
the Securities and
Exchange Commission
upon request.
2.3 Closing Agreement dated
as of February 1, 2001,
by and among ABN AMRO
North America Holding
Company, Alleghany
Asset Management, Inc.
and Alleghany
Corporation. Alleghany
Corporation agrees to
furnish supplementally
a copy of any omitted
exhibit or schedule to
the Securities and
Exchange Commission
upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALLEGHANY CORPORATION
Date: February 14, 2001 By: /s/ PETER R. SISMONDO
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Name: Peter R. Sismondo
Title: Vice President, Controller,
Treasurer and
Assistant Secretary
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ANNEX A
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated balance sheet at September 30,
2000 gives effect to the merger of Alleghany's wholly-owned subsidiary AAM with
a wholly-owned subsidiary of ABN AMRO as if the merger had occurred at September
30, 2000, and the unaudited pro forma consolidated statements of earnings for
the nine months ended September 30, 2000 and for the year ended December 31,
1999 give effect to such merger as if it had occurred on January 1, 1999. The
unaudited pro forma results do not reflect the after-tax gain on the transaction
of approximately $473 million. Unaudited pro forma financial information does
not purport to be indicative of either the results of future operations or the
results of operations that would have occurred had the transaction been
consummated on the dates indicated.
The unaudited pro forma financial statements should be read in conjunction with
Alleghany's historical consolidated financial statements and notes thereto
previously filed in Alleghany's Annual Report on Form 10-K for the year ended
December 31, 1999 and Alleghany's Quarterly Reports on Form 10-Q for the
quarters ended March 31, June 30 and September 30, 2000.
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ALLEGHANY CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2000
(UNAUDITED)
($ IN 000'S)
PRO FORMA
AAM PRO FORMA BALANCE
9/30/2000 ADJUSTMENTS ADJUSTMENTS SHEET
--------- ----------- ----------- ----------
ASSETS
Available for sale securities:
09/30/2000
Fixed maturities ----------
U.S. government, government agency
and municipal obligations (amortized cost $ 3,505 ) $ 3,457 $ - $ - $ 3,457
Short-term investments (amortized cost $ 525,124 ) 525,124 - - 525,124
Bonds, notes and other (amortized cost $ 7,987 ) 7,980 - - 7,980
Equity securities (cost $ 236,410 ) 427,794 - - 427,794
--------- ----------- ----------- ----------
964,355 964,355
Cash 1,062 - 825,000 826,062
Premium trust funds 238,928 - - 238,928
Notes receivable 92,156 - - 92,156
Funds held, accounts and other receivables 353,820 - 17,000 370,820
Property and equipment-at cost, less accumulated
depreciation and amortization 166,251 - - 166,251
Reinsurance receivable 322,466 - - 322,466
Other assets 530,919 - - 530,919
Net assets of discontinued operations 41,705 (41,705) - -
--------- ----------- ----------- ----------
$ 2,711,662 $(41,705) $842,000 $3,511,957
========= =========== =========== ==========
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Property and casualty losses and LAE 606,616 - - 606,616
Unearned premiums 348,182 - - 348,182
Other liabilities 349,908 - 310,449 660,357
Long-term debt of subsidiaries 243,995 - - 243,995
Net deferred tax liability 12,045 - - 12,045
--------- ----------- ----------- ----------
Total Liabilities 1,560,746 - 310,449 1,871,195
--------- ----------- ----------- ----------
Common stockholders' equity 1,150,916 (41,705) 531,551 1,640,762
--------- ----------- ----------- ----------
Total Liabilities and Equity $ 2,711,662 $ (41,705) $ 842,000 $3,511,957
========= =========== =========== ==========
See accompanying footnotes.
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ALLEGHANY CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
SEPTEMBER 30, 2000
(UNAUDITED)
($ in 000's, except share amounts)
PRO FORMA
AAM URG PRO FORMA STATEMENT
9/30/00 ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS OF EARNINGS
--------- ----------- ------------ ----------- -----------
Revenues:
Net property and casualty premiums earned $ 289,313 $ - $ (95,965) $ - $ 193,348
Interest, dividend and other income 169,532 - (29,584) - 139,948
Net mineral and filtration sales 154,395 - - - 154,395
Net gain on investment transactions 158,742 - (440) - 158,302
--------- ----------- ------------- ----------- -----------
Total revenues 771,982 - (125,989) - 645,993
--------- ----------- ------------- ----------- -----------
Costs and expenses:
Commissions and brokerage expenses 88,468 - (29,991) - 58,477
Salaries, administrative and other
operating expenses 209,138 - (41,082) - 168,056
Property and casualty losses & LAE 276,736 - (105,683) - 171,053
Cost of mineral and filtration sales 107,714 - - - 107,714
Interest expense 19,039 - (5,346) - 13,693
Corporate administration 16,010 - - - 16,010
--------- ----------- ------------- ----------- -----------
Total costs and expenses 717,105 - (182,102) - 535,003
--------- ----------- ------------- ----------- -----------
Earnings before income taxes 54,877 - 56,113 - 110,990
Income tax benefit (22,699) - 22,267 - (432)
--------- ----------- ------------- ----------- -----------
Net earnings from continuing
operations 77,576 - 33,846 - 111,422
Net earnings from discontinued
operations 25,004 (25,004) - - -
--------- ----------- ------------- ----------- -----------
Net earnings $ 102,580 $ (25,004) $ 33,846 $ - $ 111,422
========= =========== ============= =========== ===========
Basic earnings per share $ 13.93 $ 15.13
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Diluted earnings per share $ 13.80 $ 14.99
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Average shares outstanding 7,362,148 7,362,148
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See accompanying footnotes.
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ALLEGHANY CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
DECEMBER 31, 1999
(UNAUDITED)
($in 000's, except share amounts)
PRO FORMA
AAM URG PRO FORMA STATEMENT
12/31/99 ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS OF EARNINGS
-------- ----------- ----------- ----------- -----------
Revenues:
Investment management fees $ 165,673 $ (165,673) $ - $ - $ -
Net property and casualty premiums earned 719,846 - (498,662) - 221,184
Interest, dividend and other income 200,135 (2,633) (93,037) - 104,465
Net mineral and filtration sales 208,480 - - - 208,480
Net gain on investment transactions 82,029 - (1,521) - 80,508
--------- ----------- ----------- ----------- -----------
Total revenues 1,376,163 (168,306) (593,220) - 614,637
--------- ----------- ----------- ----------- -----------
Costs and expenses:
Commissions and brokerage expenses 172,527 - (110,862) - 61,665
Salaries, administrative and other
operating expenses 304,197 (114,072) (43,990) - 146,135
Property and casualty losses & LAE 548,459 - (379,615) - 168,844
Cost of mineral and filtration sales 139,107 - - - 139,107
Interest expense 32,337 - (16,031) - 16,306
Corporate administration 17,632 - - - 17,632
--------- ----------- ----------- ----------- -----------
Total costs and expenses 1,214,259 (114,072) (550,498) - 549,689
--------- ----------- ----------- ----------- -----------
Earnings before income taxes 161,904 (54,234) (42,722) - 64,948
Income taxes 61,799 (22,052) (4,927) - 34,820
--------- ----------- ----------- ----------- -----------
Net earnings $ 100,105 $ (32,182) $ (37,795) $ - $ 30,128
--------- ----------- ----------- ----------- -----------
Basic earnings per share* $ 13.39 $ 4.03
========= ===========
Diluted earnings per share* $ 13.19 $ 3.97
========= ===========
Average shares outstanding* 7,477,200 7,477,200
========= ===========
* Adjusted to reflect the dividend of common stock in March 2000.
See accompanying footnotes.
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FOOTNOTES
1. The merger was completed on February 1, 2001.
2. Alleghany received pre-tax proceeds from ABN AMRO of about $825
million in cash upon the sale of AAM. Pro forma adjustments included
approximately $8.9 million of pre-tax transaction expenses, a $0.7
million minimum pension liability and current federal and state income
taxes of approximately $301 million. The Company also expects to
receive approximately $17 million from ABN AMRO upon the determination
of a post-closing adjustment based upon AAM's stockholder's equity as
provided by the terms of the Merger Agreement. As such, a $17 million
receivable has been booked on the unaudited pro forma consolidated
balance sheet.
3. On May 10, 2000, Alleghany completed the sale of its wholly-owned
subsidiary Underwriters Re Group, Inc. ("URG") to Swiss Re America
Holding Corporation. Unaudited pro forma consolidated financial
information regarding the sale of URG is presented in Alleghany's
Current Report on Form 8-K filed on May 25, 2000. The unaudited pro
forma consolidated statements of earnings for the nine months ended
September 30, 2000 and for the year ended December 31, 1999 included in
this Annex A exclude URG's results of operations for the periods
presented; however, the unaudited pro forma consolidated statement of
earnings for the nine months ended September 30, 2000 includes the
after-tax gain on sale of URG of $143.8 million.
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Index to Exhibits
Exhibit Number Exhibit Description
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2.1 Agreement and Plan of
Merger dated as of
October 18, 2000, by
and among ABN AMRO
North America Holding
Company, Alleghany
Asset Management, Inc.
and Alleghany
Corporation, filed as
Exhibit 2.1 to
Alleghany's Current
Report on Form 8-K for
October 18, 2000, is
incorporated herein by
reference.
2.2 Amendment to the
Agreement and Plan of
Merger dated as of
January 17, 2001, by
and among ABN AMRO
North America Holding
Company, Alleghany
Asset Management, Inc.
and Alleghany
Corporation. Alleghany
Corporation agrees to
furnish supplementally
a copy of any omitted
exhibit or schedule to
the Securities and
Exchange Commission
upon request.
2.3 Closing Agreement dated
as of February 1, 2001,
by and among ABN AMRO
North America Holding
Company, Alleghany
Asset Management, Inc.
and Alleghany
Corporation. Alleghany
Corporation agrees to
furnish supplementally
a copy of any omitted
exhibit or schedule to
the Securities and
Exchange Commission
upon request.