Allstate Announces $1.25 Billion Sale of Group Health Business to Nationwide
The Allstate Corporation (NYSE: ALL) has entered into a definitive agreement to sell its Group Health division to Nationwide for a total of $1.25 billion in cash. This amount will be adjusted based on the closing balance sheet and is subject to regulatory approvals and other standard closing conditions. For the first three quarters of 2024, Group Health generated $608 million in revenue and an Adjusted Net Income of $69 million.
Strategic Move to Maximize Shareholder Value
Tom Wilson, Chair, President, and CEO of Allstate, commented on the deal, stating, “This transaction represents another significant step in our strategy to increase shareholder value. By aligning Health & Benefits with companies that share similar strategic goals, we aim to create long-term growth opportunities. Group Health’s offerings, particularly its stop-loss insurance for small businesses, will now complement Nationwide’s broad range of insurance products. Along with the previously announced sale of Employer Voluntary Benefits to StanCorp Financial Group, Inc. (The Standard), the combined sale proceeds amount to $3.25 billion.”
Wilson also noted that Allstate plans to retain or merge its Individual Health business, which generated an Adjusted Net Income of $18 million during the first nine months of 2024.
Strong Capital Position for Nationwide
Jess Merten, Allstate’s CFO, shared, “Nationwide’s strong capital position and this acquisition support their growth by expanding their product portfolio and enhancing their distribution capabilities. Allstate initially acquired the Group Health business in 2021 as part of the $4.0 billion acquisition of National General. The sale is expected to result in a financial book gain of approximately $450 million, an increase in deployable capital by $0.9 billion, although adjusted net income return on equity is anticipated to decrease by 75 basis points post-closing, which is expected in 2025.”
Advisors and Legal Counsel
J.P. Morgan and Ardea Partners are acting as financial advisors, with Willkie Farr & Gallagher LLP providing legal counsel to Allstate. Citi is advising Nationwide, with Squire Patton Boggs LLP acting as their legal counsel.
About Allstate
The Allstate Corporation (NYSE: ALL) offers a wide range of protection products, including auto, home, electronics, and identity theft insurance. These are distributed through a network of Allstate agents, independent agents, major retailers, online platforms, and workplaces. Known for its slogan “You’re in Good Hands with Allstate,” Allstate continues to innovate in the insurance space. For more information, visit https://gmfy.site/
About Nationwide
Nationwide, headquartered in Columbus, Ohio, is a leading diversified insurance and financial services company. As a Fortune 100 company, Nationwide holds an A+ rating from Standard & Poor’s. Nationwide offers a wide range of insurance and financial products, including auto, homeowners, farm, life insurance, annuities, retirement plans, and specialty insurance. They are committed to customer-focused innovation and maintaining their status as one of the strongest organizations in the industry.
Forward-Looking Statements
This announcement includes “forward-looking statements,” which are based on estimates and assumptions that are subject to change. These projections are made under the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements may be identified by terms such as “expects,” “plans,” “anticipates,” and similar expressions. While these statements reflect current expectations, actual results may vary due to a variety of risks and uncertainties, as detailed in Allstate’s filings with the U.S. Securities and Exchange Commission.