Allstate Sells Group Health Business to Nationwide for $1.25 Billion
Deal News | Jan 31, 2025 | Re-Insurance News
Allstate Corporation announced a definitive agreement to sell its Group Health business to Nationwide for $1.25 billion in cash. The transaction is set to advance Nationwide's growth strategy in employer benefits, particularly stop-loss insurance for small businesses. Nationwide's financial portfolio is expected to be bolstered by the acquisition, which serves to diversify its offerings. The deal is part of Allstate's wider strategy to consolidate its Health & Benefits businesses under companies that offer strategic alignment. The sale is projected to generate a financial gain and increase deployable capital for Allstate while reducing its adjusted net income return on equity. Supporting advisors in the transaction include J.P. Morgan and Ardea Partners for Allstate, with Citi advising Nationwide. Additionally, Allstate has previously sold its Employer Voluntary Benefits segment to StanCorp Financial Group, and the Individual Health business remains in strategy considerations for future deals.
Sectors
- Insurance
- Financial Services
Geography
- United States – Both Allstate and Nationwide are major US-based companies, and the transaction is occurring within the US market.
Industry
- Insurance – The main industry focus here is insurance, specifically health insurance, as both Allstate and Nationwide are involved in health-related products and services.
- Financial Services – The transaction has a significant impact on Nationwide's financial services by diversifying and expanding its portfolio in employer benefits.
Financials
- 1.25 billion – The cash consideration for the acquisition of Allstate's Group Health business by Nationwide.
- 450 million – Estimated financial book gain expected from the transaction by Allstate.
- 0.9 billion – Increase in deployable capital for Allstate resulting from the sale.
- 608 million – Revenues generated by Group Health for the first nine months of 2024.
- 69 million – Adjusted net income generated by Group Health for the first nine months of 2024.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Allstate Corporation | Selling Company | Company | A US primary insurer known for a wide range of insurance products, currently divesting its Group Health business. |
| Nationwide | Bidding Company | Company | A US-based insurance and financial services company acquiring Allstate's Group Health business. |
| J.P. Morgan | Financial Advisor to Allstate | Company | Provided financial advisory services to Allstate for the transaction. |
| Ardea Partners | Financial Advisor to Allstate | Company | Assisted Allstate in the financial advisory aspect of the sale. |
| Willkie Farr & Gallagher LLP | Legal Advisor to Allstate | Company | Provided legal advisory services to Allstate for the transaction. |
| Citi | Financial Advisor to Nationwide | Company | Provided financial advisory services to Nationwide for the acquisition. |
| Squire Patton Boggs LLP | Legal Advisor to Nationwide | Company | Provided legal advisory services to Nationwide for the acquisition. |
| Tom Wilson | Chair, President and CEO of Allstate | Person | Commented on the strategic value of the transaction for Allstate. |
| Jess Merten | Chief Financial Officer of Allstate | Person | Discussed Nationwide's financial strength and impact on Allstate's strategy. |
| Kirt Walker | CEO of Nationwide | Person | Spoke about the alignment of the acquisition with Nationwide's mission. |
| John Carter | President and COO of Nationwide Financial | Person | Discussed the strategic impact of the acquisition on Nationwide's offerings. |