Prosperity Life Group on Oct. 9 announced that its affiliate, S. USA Life Insurance Company, Inc., will acquire National Western Life Group in an all-cash transaction valued at approximately $1.9 billion.
The deal comes months after Prosperity abandoned a takeover approach for National Western’s peer American Equity Investment Life.
“The acquisition of National Western represents a significant milestone in the continued expansion of our insurance business. We look forward to welcoming National Western to Prosperity Life Group,” said Nicholas von Moltke, President and CEO of Prosperity. “National Western’s capabilities will further complement our ambition to deliver a compelling value proposition to our policyholders and the company.”
As part of the agreement, each issued and outstanding share of National Western common stock will be converted into the right to receive $500 in cash at closing of the merger. That represents an 87.1% premium to the unaffected Class A Common Stock share price of $267.29 on May 16, 2023 (before it announced it was exploring strategic alternatives), as well as an 11.8% premium over National Western’s 30-day volume-weighted average price as of October 6, 2023. The merger has received the unanimous approval of National Western’s Board of Directors.
“This is an exciting moment in National Western’s history. I would like to thank our board of directors, particularly our strategic opportunities committee of independent directors, which conducted a thorough review of a range of strategic alternatives and possible business opportunities to maximize value for our stockholders,” said Ross R. Moody, Chairman of the Board and CEO of National Western. “The transaction provides clear and immediate value for our stockholders at an attractive premium.”
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. The merger is expected to close in the first half of 2024.