May 10, 2012 / 9:10 PM / 7 years ago

Cigna to acquire Great American Supplemental Benefits

* Cigna to pay about $295 mln cash

* Closing expected in second-half 2012

May 10 (Reuters) - Insurer Cigna Corp plans to acquire American Financial Group’s supplemental health insurance unit for around $295 million in cash, the companies said on Thursday.

American Financial said it expects an after-tax gain of $95 million to $105 million from the sale, which is expected to close in the second half of the year. The company also said the deal would dilute its earnings slightly in the short term.

Cigna said the deal to acquire Great American Supplemental Benefits provides significant opportunities for growth, including expanding Medicare and individual supplemental offerings to Cigna customers.

“Great American Supplemental Benefits is an ideal strategic fit with Cigna’s growth plans to expand our presence in the U.S. Individual and Seniors segments through a broad range of supplemental health solutions,” Thomas Richards, president of Cigna’s individual and family Plans, said in a statement.

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