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Acquisition of Businesses | 9 Months Ended
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Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisition of Business | Acquisition of Businesses Crop Risk Services On July 3, 2023, AFG completed the acquisition of Crop Risk Services (“CRS”) from American International Group (“AIG”). CRS is a primary crop insurance general agent based in Decatur, Illinois, with crop year 2022 gross written premiums of approximately $1.2 billion and was the seventh largest provider of multi-peril crop insurance in the United States based on 2022 premiums. At closing, AFG paid AIG $234 million (based on an estimated $24 million in net tangible assets) using cash on hand. The purchase is subject to post closing adjustments, which are not expected to be material and will be finalized in the fourth quarter of 2023. AFG expensed the $3 million in acquisition expenses incurred. The purchase price was allocated to the acquired assets and liabilities of CRS based on management’s best estimate of fair value as of the acquisition date. The preliminary purchase price allocation is shown below (in millions).
| July 3, 2023
Cash paid at purchase | $ | 234 |
Tangible assets acquired: |
Cash and cash equivalents | $ | 26 |
Agents’ balances and premiums receivable | 164 |
Other assets | 3 |
Total tangible assets acquired | $ | 193 |
Liabilities acquired: |
Other liabilities | $ | 169 |
Total liabilities acquired | 169 |
Net tangible assets acquired, at fair value | 24 |
Excess purchase price over net tangible assets acquired | $ | 210 |
Allocation of excess purchase price: |
Intangible assets acquired (*) | $ | 124 |
Deferred tax asset (*) | 1 |
Goodwill | 85 |
| $ | 210 |
(*)Included in Other assets in AFG’s Balance Sheet. In the preliminary purchase price allocation, $124 million of the purchase price was recognized as finite lived intangible assets primarily related to existing agency relationships, which will be amortized over an average estimated life of approximately 14 years. The acquisition resulted in the recognition of $85 million in GAAP basis goodwill based on the excess of the purchase price over the fair value of the net assets acquired. The acquisition resulted in $79 million of tax basis goodwill which is deductible for tax purposes. In the third quarter of 2022, AFG acquired an insurance agency business for $12 million, including $10 million in cash. Virtually all of the purchase price was recorded as an amortizing intangible asset representing the fair value of the agency’s customer base at acquisition.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent + Details
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