(RTTNews) - Allstate Corporation (ALL) Thursday said it has agreed to sell its Group Health business to Nationwide for $1.25 billion in cash.
For the first nine months of 2024, Group Health had revenues of $608 million and adjusted net income of $69 million.
"We reached another milestone in the strategy to maximize shareholder value by combining the Health & Benefits businesses with companies that have greater strategic alignment," said Tom Wilson, Allstate's Chair, President and CEO. "Group Health provides stop-loss insurance to small businesses, which will gain access to Nationwide's complementary product offerings. When combined with the previously announced sale of Employer Voluntary Benefits to StanCorp Financial Group, Inc., (The Standard), total sale proceeds will be $3.25 billion. The Individual Health business, with Adjusted Net Income of $18 million for the first nine months of 2024, will either be retained or combined with another company."
"Nationwide is extremely well capitalized and this transaction advances its growth strategy by expanding its product portfolio and distribution capabilities," said Jess Merten, Allstate's Chief Financial Officer. "Allstate acquired the Group Health business in 2021 as part of the $4.0 billion acquisition of National General. The sale is expected to generate a financial book gain of about $450 million, increase deployable capital by $0.9 billion but reduce adjusted net income return on equity by 75 basis points after closing, which is expected in 2025."
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