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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) November 28, 1995
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Aetna Life and Casualty Company
____________________________________________________________________
(Exact name of registrant as specified in its charter)
Connecticut
____________________________________________________________________
(State or other jurisdiction of incorporation)
1-5704 06-0843808
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(Commission File Number) (I.R.S. Employer
Identification No.)
151 Farmington Avenue, Hartford, Connecticut 06156
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(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code (860) 273-0123
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Not Applicable
_____________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
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TABLE OF CONTENTS
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Page
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Item 5. Other Events. 3
Item 7(c). Exhibits. 3
Signatures 4
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Item 5. Other Events.
Aetna Life and Casualty Company entered into a definitive agreement,
dated November 28, 1995, to sell its property-casualty operations to
The Travelers Insurance Group Inc. for total consideration of $4.0
billion in cash. The sale has been approved by both companies'
boards of directors and is expected to be completed by mid-year 1996,
subject to regulatory approval and other customary conditions. A
copy of the press release announcing this sale is attached hereto as
Exhibit 99.1, which exhibit is incorporated herein by reference.
Item 7(c). Exhibits.
Exhibit 99.1 -- Press Release of Aetna Life and Casualty Company
dated November 29, 1995.
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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 thereunto duly
authorized.
Aetna Life and Casualty Company
_______________________________
(Registrant)
Date November 29, 1995 By /s/ Robert J. Price
____________________________
(Signature)
Robert J. Price
Vice President and
Corporate Controller
(Chief Accounting Officer)
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AETNA TO SELL PROPERTY/CASUALTY OPERATIONS
TO TRAVELERS FOR $4.0 BILLION
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Will Focus on Building National Managed Health Care
Franchise and Expanding Retirement Services and
International Businesses
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HARTFORD, Conn. -- Aetna Life and Casualty (NYSE: AET) announced
today that, as part of a strategic refocusing of the Company, it has
entered into a definitive agreement to sell its Property/Casualty
operations to Travelers Group for total consideration of $4.0 billion
in cash. The sale has been approved by both companies' boards of
directors and is subject to regulatory approval and other customary
conditions.
"The sale of the Property/Casualty business represents an historic
shift for Aetna," Chairman Ronald E. Compton said. "We've made a
strategic decision to focus on growth opportunities in our managed
health care and financial services businesses both in the U.S. and
selected international markets.
"Health care and retirement security are increasingly central
concerns to our customers. Our goal is to make the Aetna name
synonymous with best-value products, information and expert advice to
help each of them plan for a healthier, more secure future.
"Aetna now has three core businesses -- Aetna Health Plans, Aetna
Retirement Services and Aetna International -- each with strong
market positions and above-average returns. Each will now have the
resources needed to grow and become even more competitive and
profitable."
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Noting that the P/C transaction would by itself be dilutive to 1996
earnings, Compton said, "We are optimistic that earnings from
anticipated acquisitions and the aggressive pursuit of a variety of
new opportunities made possible by increased scale in our remaining
businesses will help to mitigate any dilution in the near term."
As part of the sale agreement, Travelers has agreed to assume eight
years of Aetna's lease at CityPlace in downtown Hartford. Upon
completion of the transaction, the facility will house the P/C
employees currently located at Aetna's headquarters complex. Aetna
employees currently located at CityPlace will in turn relocate to the
headquarters complex. Consistent with its focus on eliminating
unnecessary costs, Aetna expects to take an approximately $190
million after-tax charge for the remaining CityPlace lease obligation
at the close of the transaction.
Aetna Health Plans (AHP) is the country's third largest health care
company in this rapidly growing, nearly $1 trillion market. In
addition to providing health care coverage through health maintenance
organizations, point-of-service plans, preferred provider
organizations and traditional fee-for-service plans, AHP also offers
a broad range of specialty health and group insurance products. In
total, AHP products and services reach 19 million Americans. The
company serves 25 percent of the Fortune 1000 and 19,000 employers
overall. AHP's 1994 revenues were $7.1 billion and operating
earnings were $355 million.
"Aetna has been investing heavily in the health business to broaden
our managed care capabilities, increase membership in key markets and
create new managed health care programs that customers increasingly
demand," Compton said. "As part of that strategy, we will look for
opportunities to make strategic investments or acquisitions to
further strengthen our overall position. With consolidation in the
industry and a shift to managed care, we expect to see the emergence
of a handful of leading national managed health care providers.
Aetna intends to be the best of them."
Aetna's financial services business markets a variety of retirement,
investment and life insurance products to individuals, businesses and
not-for-profit institutions. Assets under management as of September
30, 1995 were $71.2 billion. These businesses contributed $234.3
million to Aetna's operating earnings in 1994.
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"Aetna has built a strong position in several important retirement
market niches," Compton said. "We are working to strengthen our
position as an equity fund and financial planning provider, and
broaden our distribution channels to give customers easier access to
our products and services. We are exploring investments and
acquisitions to achieve that goal. This market is growing at about
15 percent a year, fueled by the aging of the baby boomers and their
concerns about gaps in their retirement benefits. We see real
opportunities here."
Aetna International has an established and strong position in key
emerging markets including Chile, Mexico, Taiwan, Hong Kong and
Malaysia. Aetna's international businesses offer health care,
financial security and retirement planning products and services to
approximately 2.5 million customers in 10 countries. The company
expects to continue developing its current international operations
and to penetrate new markets where suitable opportunities exist.
International's operating earnings in 1994 were $69 million.
In 1994, Aetna's Property/Casualty business, which includes personal
and commercial insurance, accounted for $5.3 billion of Aetna's total
revenues of $17.5 billion and $60 million of Aetna's $510 million in
operating earnings. It employs approximately 11,600 of the company's
41,000 workers.
"We have been pleased with improving results in our P/C business,"
Compton said. "The combination with Travelers' P/C business will
create a powerhouse P/C operation. For this reason, we have agreed
with Travelers -- separate from the P/C sale agreement -- to invest
up to $200 million in a potential 1996 offering of common stock in
the new entity.
"The transformation under way at Aetna will create an even stronger
company, headquartered in Hartford, that will continue to be a
leading corporate citizen and employer in the communities where we do
business," Compton said.
