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.
