Prosperity Life’s unit to buy insurer National Western in $1.9 billion deal

Reuters

(Reuters) -A unit of insurer Prosperity Life Group has agreed to buy National Western Life Group in a deal valued at $1.9 billion, the companies said on Monday, sending shares of the Texas-based life insurer to their highest levels in six weeks.

The deal comes months after Prosperity abandoned a takeover approach for National Western’s peer American Equity Investment Life Holding.

Shares of National Western, which offers life insurance plans as well as annuity products, were up 13.6% at $474.10.


“The acquisition of National Western represents a significant milestone in the continued expansion of our insurance business,” said Nicholas von Moltke, CEO of Prosperity, which also has a reinsurance and asset management arm.

The deal offers National Western’s investors $500 apiece, representing a premium of more than 87% to the company’s unaffected share price on May 16 before it announced it was exploring strategic alternatives.

The transaction also comes at a nearly 20% premium to the stock’s last close on Friday.

Activist-investor Elliott Investment Management will back the deal with a capital commitment, the companies said, adding that Prosperity will also use cash and debt to finance the deal, which is expected to close in the first half of 2024.

(Reporting by Niket Nishant in Bengaluru; Editing by Shailesh Kuber and Sherry Jacob-Phillips)

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