Life assurer Prudential has taken over a US financial services company in a £18 billion deal.

Prudential said the acquisition of Houston-based American General would create a "top-tier" international financial services business, with leading positions in the US, the UK and Asia.

The company will integrate its US operations, Jackson National Life and PPM America into the American General business.

Prudential shareholders will own 50.5 per cent of the combined group. Chairman Sir Roger Hurn will continue as group chairman, while Jonathan Bloomer will continue as group chief executive.

American General's chairman and chief executive Robert Devlin will join Prudential's board as deputy chairman. He will run the combined group's North American operations.

Mr Bloomer said: "Our two companies are a great fit.

"Not only will this give us a leading position in the US, it also gives us the scale and financial strength to allow for continued expansion and faster growth in the other regions of the world in which we operate."

Prudential said the combined Prudential, American General group would have a market capitalisation of £30.8 billion.

This would make it the sixth-largest international insurance business and the 11th largest company in the FTSE 100-Index on the London Stock Exchange.

The combined group's operating profits, before goodwill, would have been £1.9 billion for the 12 months to December 31.

New business written during the year would have been £3.2 billion.

American General's business is primarily focused on asset accumulation, life insurance and consumer lending, mainly in its domestic US market.