Alabama-Based Alfa Mutual to Buy Rest of Alfa Corp. for $840 Million

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Life insurance company Alfa Corp. has agreed to be acquired by its majority owners, Alfa Mutual Insurance Co. and Alfa Mutual Fire Insurance Co., for about $840 million.

Alfa Mutual will pay $22 per share for shares of Alfa Corp. not already held, a premium of nearly 26 percent.

The company said Monday an independent special committee of the board approved the agreement, and its independent directors support the transaction.

“In order for the Alfa companies to compete effectively over the long term, we must accelerate our investment in technology, accelerate expansion in our distribution channels and take other actions designed to promote long-term growth,” said Jerry Newby, president and chief executive. “We’re confident this can be accomplished more effectively with a simpler and more nimble corporate structure.”

The transaction is subject to a number of conditions, including, among others, approvals by government regulators and the stockholders of Alfa Corp. and is expected to be completed in the first half of 2008.

Lazard served as the independent financial adviser to the Special Committee of the Alfa Corp., and Goldman, Sachs & Co. served as the financial adviser to the Alfa Mutual Group.