425 1 y46544ie425.txt 425 1 Filed by: Prudential plc Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: American General Corporation Exchange Act Commission File No: 001-07981 Prudential plc and American General Corporation (the "Company") will be filing a proxy statement/prospectus and other relevant documents concerning the proposed transaction with the SEC. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ON THE PROPOSED TRANSACTION. Investors will be able to obtain the document free of charge at the SEC's website (www.sec.gov). In addition, documents filed with the SEC by Prudential plc and the Company may be obtained free of charge by contacting Prudential plc, Laurence Pountney Hill, London, EC4R OHH, England, Attention: Investor Relations (tel.: (44 20) 7548 3537), and the Company, 2929 Allen Parkway, Houston, Texas, 77019, Attention: Investor Relations (tel.: (713) 522-1111). INVESTORS SHOULD READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY WHEN IT BECOMES AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION. The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from Company shareholders. The directors and executive officers of the Company include: J. Evans Attwell, Brady F. Carruth, W. Lipscomb Davis Jr., J. Edward Easler II, Larry D. Horner, Richard J.V. Johnson, Morris J. Kramer, Michael E. Murphy, Michael J. Poulos, Robert E. Smittcamp, Anne M. Tatlock, Robert M. Devlin, Mark S. Berg, James P. Corcoran, David W. Entrekin, Frederick W. Geissinger, John A. Graf, John V. LaGrasse, Rodney O. Martin Jr., Nicholas R. Rasmussen, Gary D. Reddick and Richard W. Scott. Collectively, as of February 28, 2001, the directors and executive officers of the Company beneficially owned approximately 2% of the outstanding shares of the Company's common stock. Shareholders may obtain additional information regarding the interests of such participants by reading the proxy statement/prospectus when it becomes available. 2 THE FOLLOWING ARE SLIDES FOR USE IN ROADSHOW PRESENTATIONS. 3 [PRUDENTIAL LOGO] [AMERICAN GENERAL FINANCIAL GROUP LOGO] A MAJOR INTERNATIONAL FORCE IN RETAIL FINANCIAL SERVICES 4 [PRUDENTIAL LOGO] [AMERICAN GENERAL FINANCIAL GROUP LOGO] PROXY STATEMENT/PROSPECTUS Prudential plc and American General Corporation will be filing a proxy statement/prospectus and other relevant documents concerning the proposed transaction with the SEC. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ON THE PROPOSED TRANSACTION. Investors will be able to obtain the document free of charge at the SEC's website (www.sec.gov). In addition, the proxy statement/prospectus and other relevant documents concerning the proposed transaction and filed with the SEC may be obtained free of charge by contacting Prudential plc, Laurence Pountney Hill, London EC4R 0HH, England, Attention: Investor Relations (tel: (44 20) 7548 3537), and American General Corporation, 2929 Allen Parkway, Houston, Texas, 77019, Attention: Investor Relations (tel: (713) 522-1111). American General Corporation and its directors and executive officers may be deemed to be participants in the solicitation of proxies from stockholders of American General Corporation. The directors and executive officers of American General Corporation include: J. Evans Attwell, Brady F. Carruth, W. Lipscomb Davis Jr., J. Edward Easler II, Larry D. Horner, Richard J.V. Johnson, Morris J. Kramer, Michael E. Murphy, Michael J. Poulos, Robert E. Smittcamp, Anne M. Tatlock, Robert M. Devlin, Mark S. Berg, James P. Corcoran, David W. Entrekin, Frederick W. Geissinger, John A. Graf, John V. LaGrasse, Rodney O. Martin Jr., Nicholas R. Rasmussen, Gary D. Reddick and Richard W. Scott. Collectively, as of February 28, 2001, the directors and executive officers of American General Corporation beneficially owned approximately 2% of the outstanding shares of the common stock of American General Corporation. Stockholders may obtain additional information regarding the interests of such participants by reading the proxy statement/prospectus when it becomes available. 1 5 [PRUDENTIAL LOGO] [AMERICAN GENERAL FINANCIAL GROUP LOGO] A TRANSFORMATIONAL DEAL - CREATES ONE OF THE WORLD'S PRE-EMINENT FINANCIAL SERVICES COMPANIES - SIGNIFICANT AND LOGICAL EXTENSION OF STATED STRATEGY - MARKET LEADERSHIP IN THE US - QUALITY INTERNATIONAL FRANCHISE FOCUSED ON GROWTH OPPORTUNITIES - FINANCIAL STRENGTH TO CONTINUE INTERNATIONAL EXPANSION - COMBINES TWO EXCELLENT MANAGEMENT TEAMS WITH SHARED VISION A POWERHOUSE TO DELIVER FURTHER SHAREHOLDER VALUE 2 6 [PRUDENTIAL LOGO] [AMERICAN GENERAL FINANCIAL GROUP LOGO] STRATEGIC RATIONALE 3 7 [PRUDENTIAL LOGO] [AMERICAN GENERAL FINANCIAL GROUP LOGO] ACHIEVES STATED STRATEGIC OBJECTIVES - INTERNATIONAL SCALE PLAYER - ACHIEVES LEADERSHIP POSITIONS IN CHOSEN MARKETS - ADVANCES MULTI-PRODUCT, MULTI-DISTRIBUTION CHANNEL BUSINESS MODEL - DIVERSIFICATION OF BUSINESS ENHANCES QUALITY OF EARNINGS - BUILDS SCALE AND RESOURCES FOR FUTURE DEVELOPMENT DELIVERS FASTER GROWTH AND GREATER VALUE CREATION 4 8 [PRUDENTIAL LOGO] [AMERICAN GENERAL FINANCIAL GROUP LOGO] STRATEGIC OBJECTIVES [PRUDENTIAL LOGO] - ACHIEVE LEADING POSITIONS IN WORLD'S LARGEST MARKETS - OBTAIN PRODUCT/DISTRIBUTION EXPERTISE FOR EXPORT TO DEVELOPING MARKETS - IMPROVE CASH FLOW AVAILABLE FOR INVESTMENT IN NEW OPPORTUNITIES - GROW CAPITAL BASE FOR FURTHER EXPANSION - APPLY ACQUISITION ACUMEN TO DRIVE VALUE CREATION [AMERICAN GENERAL FINANCIAL GROUP LOGO] - FURTHER DIVERSIFY EARNINGS BASE - STRATEGIC PARTNERSHIP FOR EXPANSION INTO HIGHER GROWTH/RETURN MARKETS - HIGHER UTILIZATION OF SUBSTANTIAL FREE CASH FLOW - APPLY DOMESTIC EXPERTISE WHILE ACQUIRING INTERNATIONAL ACCESS - APPLY ACQUISITION ACUMEN TO DRIVE VALUE CREATION [ARROW GRAPHIC] RESULT: THE POWER OF PRUDENTIAL 5 9 [PRUDENTIAL LOGO] [AMERICAN GENERAL FINANCIAL GROUP LOGO] THE POWER OF CASH FLOW EXISTING MODEL NEW PARADIGM [AMERICAN GENERAL [FLOW CHART] FINANCIAL GROUP LOGO] [FLOW CHART] CASH FLOW CASH FLOW | | | No | Acquisition? ------- v | | <-- Europe [AMERICAN GENERAL --> Asia | v FINANCIAL LOGO] v Share AND Yes Buyback [PRUDENTIAL LOGO] | | v | Invest v North America - DIVERSIFICATION OF RISK - HIGHER RETURNS ON CAPITAL 6 10 [PRUDENTIAL LOGO] [AMERICAN GENERAL FINANCIAL GROUP LOGO] [FLOW CHART] [AMERICAN GENERAL FINANCIAL GROUP LOGO]-- -- FAVORABLE DEMOGRAPHIC TRENDS -- | -- | V - ASSETS ($120BN) -- FAVORABLE DEMOGRAPHIC TRENDS - US GAAP OPER. EARNINGS ($1,310MM) - - [AMERICAN GENERAL - TARGET ROE 16%+ >> FINANCIAL GROUP LOGO] [JACKSON NATIONAL LIFE LOGO] - -- -- -- - >> [JACKSON NATIONAL LIFE LOGO] | | | | | | | | V V V V - ASSETS ($44BN) MARKET ACCELERATED INCREASED COST LEADER IN GROWTH MARGINS SYNERGIES - US GAAP OPER. EARNINGS ($434MM) ALL KEY MARKETS - TARGET ROE 15% (UNLEVERED) ACCELERATING GROWTH AND PROFITABILITY
7 11 [PRUDENTIAL LOGO] [AMERICAN GENERAL FINANCIAL GROUP LOGO] WHY A MERGER? - ACHIEVES ALL PRIMARY STRATEGIC OBJECTIVES - IMPROVES GROWTH AND PROFITABILITY OF STANDALONES WHILE REDUCING RISK PROFILE - The true definition of value creation - THE POWER TO COMPETE - A true scale player - Capital base to pursue other opportunities - VERY LOW EXECUTION OR OPERATIONAL RISK - Both companies have proven track records - Management focus and energy to deliver results - DELIVERS ON COMMITMENT TO CREATE VALUE FOR SHAREHOLDERS 8 12 [PRUDENTIAL LOGO] [AMERICAN GENERAL FINANCIAL GROUP LOGO] OUR STRATEGIC POTENTIAL GROWTH OPPORTUNITIES - In U.S., broader product set delivered via expanded distribution - U.S. accumulation products exported to key markets - Expertise in U.S. bank distribution transferred to other markets - Retail consumer finance opportunities internationally - Fund management expertise leverageable EFFICIENCY OPPORTUNITIES - Capital allocation - Cost of capital - Technology/Internet applications throughout businesses - $130 million of expense synergies in U.S. by end of 2002 9 13 [PRUDENTIAL LOGO] [AMERICAN GENERAL FINANCIAL GROUP LOGO] OVERVIEW OF PRUDENTIAL 14 [PRUDENTIAL LOGO] [AMERICAN GENERAL FINANCIAL GROUP LOGO] OVERVIEW OF PRUDENTIAL plc - LEADING INTERNATIONAL RETAIL FINANCIAL SERVICES GROUP - 2000 Gross Premium Written - Pounds Sterling 18 billion - Funds under management - Pounds Sterling 165 billion (1996-2000 CAGR: 16.0%) - Market capitalisation - Pounds Sterling 17.8 billion - Over 13 million customers - Strong brand recognition - DIVERSIFIED PRODUCTS AND GEOGRAPHIES - Life insurance, pensions, annuities, investment products - 2000 new business achieved profits - 38% UK, 36% US, 25% Asia, 1% Europe - BREADTH AND SCALE OF DISTRIBUTION - Multiple channels: independent financial advisors (IFA), financial institutions, direct, remote, Internet, worksite, financial planners 11 15 [PRUDENTIAL LOGO] [AMERICAN GENERAL FINANCIAL GROUP LOGO] INTERNATIONAL FINANCIAL SERVICES PROVIDER OF SCALE
US UK ASIA -- -- ---- LEADING PAN-REGIONAL TOP 20 LIFE INSURER NO 2 LIFE INSURER BRAND AND PRESENCE TOP 5 PROVIDER IN HK, NO 2 INDIVIDUAL FIXED NO 1 LONG-TERM INSURANCE SINGAPORE, MALAYSIA, ANNUITY PROVIDER FUND VIETNAM, PHILIPPINES NO 1 EQUITY-LINKED ANNUITY TOP 3 MUTUAL FUND NO 1 PRIVATE MUTUAL FUND PROVIDER MANAGER PROVIDER IN INDIA NEW PRESENCE IN LIFE NO 20 VARIABLE ANNUITY NO 1 E-COMMERCE RETAIL INSURANCE MARKETS OF PROVIDER FINANCIAL SERVICES PROVIDER CHINA, INDIA, TAIWAN AND JAPAN
12 16 [PRUDENTIAL LOGO] [AMERICAN GENERAL CORP. GROUP LOGO] THE POWER OF PRUDENTIAL 17 [PRUDENTIAL LOGO] [AMERICAN GENERAL CORP. GROUP LOGO] CREATES A CLEAR MARKET LEADER IN THE US - PRO FORMA MARKET POSITION
============================================================================================================================ RANK --------------------------------------------- PRODUCT AMERICAN GENERAL JNL PRO FORMA ---------------------------------------------------------------------------------------------------------------------------- Total annuity sales 3 14 1 Variable annuity sales 5 20 1 Net variable annuity sales 5 8 2 Variable annuity sales through banks and thrifts 5 11 4 Fixed annuity sales 1 8 1 Fixed annuity sales through banks and thrifts 1 10 1 Equity indexed annuities -- 1 1 Number of life policies issued 2 -- 2 Individual life sales(CPPE basis) 7 -- 5 ----------------------------------------------------------------------------------------------------------------------------
SOURCE: Vards, Kenneth Kehrer Associates, LIMRA, FRC 15 18 [PRUDENTIAL LOGO] [AMERICAN GENERAL CORP. GROUP LOGO] THE POWER OF PRUDENTIAL - POWERFUL CAPITAL BASE - LEADERSHIP IN OUR CHOSEN MARKETS INTERNATIONALLY - OUTSTANDING GROWTH OPPORTUNITIES - developing market share in US - rapid expansion in Asia - exciting potential in Europe - strong position in UK - MANAGEMENT TEAM WITH SHARED VISION AND EXPERIENCE TO IMPLEMENT STRATEGY SUCCESSFULLY BOTH SETS OF SHAREHOLDERS TO SHARE IN VALUE CREATION 16 19 [PRUDENTIAL LOGO] [AMERICAN GENERAL CORP. GROUP LOGO] APPENDIX 20 [PRUDENTIAL LOGO] [AMERICAN GENERAL CORP. GROUP LOGO] TWO MEASURES OF FINANCIAL REPORTING MSB PROFITS ACHIEVED PROFITS PRESENT VALUE MEASURE OF UK GAAP STATUTORY PROFIT MEASURE SHAREHOLDER PROFITS MEASURES SHAREHOLDER CASH FLOW ALLOWS MEASUREMENT OF VALUE ADDED GENERATED BY WITH-PROFITS BUSINESS BY NEW BUSINESS SHAREHOLDER PROFITS FROM WITH-PROFITS PROVIDES PRESENT VALUE OF IN-FORCE IN-FORCE FUND ARE 1/9TH COST OF BONUS BUSINESS TO SHAREHOLDERS ANALYSTS USE THIS AS HEADLINE ANALYSTS USE TO ENABLE ESTIMATE EXTERNAL PROFIT NUMBER OF APPRAISAL VALUE OF BUSINESS 18 21 [PRUDENTIAL LOGO] [AMERICAN GENERAL CORP. LOGO] 2000 PRO FORMA FINANCIALS
============================================================================================================================= AMERICAN PRO FORMA PRO FORMA GENERAL PRUDENTIAL COMBINED COMBINED (Pounds Sterling m) (Pounds Sterling m) (Pounds Sterling m) US$ ----------------------------------------------------------------------------------------------------------------------------- New insurance business APE 1,308 1,528 2,836 4,299 New business achieved profit 500 613 1,113 1,687 MSB operating profit 1,070 840 1,910 2,895 MSB operating EPS -- 31.5p 35.3p 53.5c Total investment FUM 64 bn 165 bn 229 bn 343 bn Consumer finance receivables 7 bn 4 bn 11 bn 17 bn AP shareholders funds 7,600 8,833 16,433 24,557 =============================================================================================================================
NOTE: No adjustment has been made to include synergy benefits or the cost of the merger 19 22 [PRUDENTIAL LOGO] [AMERICAN GENERAL CORP. LOGO] DIVIDEND TREATMENT 23 [PRUDENTIAL LOGO] [AMERICAN GENERAL CORP. LOGO] CALCULATION OF SPECIAL DIVIDEND TO AGC SHAREHOLDERS - SPECIAL DIVIDEND AT CLOSING EQUALS DIFFERENCE BETWEEN DIVIDENDS OF RECORD FROM SIGNING TO CLOSE
---------------------------------------------------------------------------------------------------------------------------- ANALYSIS OF DIVIDENDS PAID TO AGC SHAREHOLDERS FROM SIGNING TO CLOSING EXCHANGE RATE (USD PER GBP) 1.46 EXCHANGE RATIO (x) 3.662
DIVIDEND AMOUNT (1) DIVIDEND TO ----------------------------------------- RECORD DATE PAY DATE PENCE USD AGC SHAREHOLDERS ---------------------------------------------------------------------------------------------------------------------------- CLOSING ON OR BEFORE AUGUST 9TH PrudentialMarch 30th May 30th 16.3p x 1.46 exchg. rate = $0.24 x 3.66 merger ratio = $0.87 AGC May 10th June 1st 0.24 Deduct 0.24 ------------ SPECIAL DIVIDEND PAID ON OR ABOUT CLOSE $0.63 ============ CLOSING ON OR AFTER AUGUST 10TH AGC Aug. 10th Sep. 1st 0.24 Deduct 0.24 ------------ SPECIAL DIVIDEND PAID ON OR ABOUT CLOSE $0.39 ----------------------------------------------------------------------------------------------------------------------------
NOTE: 1 Assumes current Pound-to-Dollar exchange rate 22 24 [PRUDENTIAL LOGO] [AMERICAN GENERAL CORP. LOGO] EXAMPLE OF DIVIDEND TAXATION FOR U.S. HOLDERS
----------------------------------------------------------------------------------- GROSS VS. NET DIVIDEND ----------------------------------------------------------------------------------- Announced Dividend $100.00 Add: Notional Tax Credit Gross-Up $ 11.11 (1/9 of announced dividend) GROSS DIVIDEND $111.11 Less: U.K. Withholding Tax ($11.11) (lesser of Notional Tax Credit or 15% of Gross Dividend) NET PRE-TAX DIVIDEND PAID $100.00 -----------------------------------------------------------------------------------
- ASSUME A $100 DIVIDEND IS ANNOUNCED - NOTIONAL TAX CREDIT IS AWARDED TO U.S. HOLDERS, EQUAL TO 1/9 OF $100, OR $11 - NOTIONAL TAX CREDIT IS OFFSET BY A U.K. WITHHOLDING TAX EQUAL TO THE LESSER OF 15% OF THE GROSS DIVIDEND OR THE AMOUNT OF THE TAX CREDIT - THEREFORE, THE SHAREHOLDER RECEIVES $100 PRE-TAX (NET DIVIDEND) 25