American Financial Group, Inc. (AFG) will pay a special dividend $14.00 per share in 2021 because of the closing of the sale of its Annuity Businesses. Last year AFG paid a $2.00 per share special dividend and raised its quarterly dividend by 11.1 percent to 50 cents per share.
American Financial Group has sold its Annuity businesses, consisting of Great American Life Insurance Company (GALIC) and its two insurance subsidiaries, Annuity Investors Life Insurance Company and Manhattan National Life Insurance Company, as well as a broker-dealer affiliate, Great American Advisors, Inc., and insurance distributor, AAG Insurance Agency, Inc. to Massachusetts Mutual Life Insurance Company (MassMutual). Total after-tax cash proceeds from the sale are approximately $3.5 billion.
In connection with the closing of this transaction, the Company has declared a special, one-time cash dividend of $14.00 per share of American Financial Group Common Stock. The dividend is payable on June 15, 2021 to holders of record on June 8, 2021. The aggregate amount of the payment to be made in connection with this special dividend will be approximately $1.2 billion. This special dividend is in addition to the Company’s regular quarterly cash dividend of $0.50 per share that was last paid on April 26, 2021.
The regular annual dividend rate of $2.00 per share yields 1.5% at a stock price of $134.64.
AFG Co-CEOs Carl H. Lindner III and S. Craig Lindner stated: “The disposition of our annuity business sharpens our focus exclusively on the Specialty P&C market and generates substantial excess capital for AFG. Returning excess capital to shareholders in the form of this $14.00 special dividend is a key component of AFG’s capital management strategy; it reflects our strong financial position and our confidence in the Company’s financial future. Our excess capital remains at a significant level, which affords us the financial flexibility to make opportunistic repurchases, pay additional dividends, grow our Specialty P&C business organically and through acquisitions and start-ups that meet our target return thresholds.”
American Financial Group is an insurance holding company, based in Cincinnati, Ohio. Through the operations of Great American Insurance Group, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses. Great American Insurance Group’s roots go back to 1872 with the founding of its flagship company, Great American Insurance Company. American Financial Group has paid an uninterrupted dividend to its shareholders every year since at least 1986.