Company: AFGC
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001042046-25-000011
Chunk: 22

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-02-25
Form: 10-K
Item: Item 9C
Chunk 22
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INUED

B.    Acquisitions 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, that generated 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 $24 million in net tangible assets) using cash on hand.Expenses related to the acquisition were $3 million and were expensed as 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 purchase price allocation is shown below (in millions).July 3, 2023Cash paid at purchase$234 Tangible assets acquired:Cash and cash equivalents$26 Agents’ balances and premiums receivable164 Other assets3 Total tangible assets acquired$193 Liabilities acquired:Other liabilities$169 Total liabilities acquired169 Net tangible assets acquired, at fair value24 Excess purchase price over net tangible assets acquired$210 Allocation of excess purchase price:Intangible assets acquired (*)$124 Deferred tax asset (*)1 Goodwill85 $210 (*)Included in Other assets in AFG’s Balance Sheet.In the 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 fourth quarter of 2024, AFG acquired an insurance agency business for $6 million, including $5 million in cash, and a consulting company for $4 million in cash. Virtually all of the purchase price for each acquisition was recorded as an amortizing intangible asset representing the fair value of the customer bases at acquisition.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