The Allstate Corporation announced a definitive agreement to sell its Group Health business to Nationwide for $1.25 billion in cash, subject to standard closing conditions and regulatory approvals. This divestiture is a key component of Allstate's strategy to maximize shareholder value by aligning its Health & Benefits businesses with companies that possess greater strategic fit.
For the first nine months of 2024, the Group Health business generated revenues of $608 million and Adjusted Net Income of $69 million. This transaction, when combined with the previously announced sale of the Employer Voluntary Benefits business, will bring Allstate's total divestiture proceeds from these segments to $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.
The sale is expected to generate a financial book gain of approximately $450 million for Allstate and increase its deployable capital by $0.9 billion. While the transaction is projected to reduce adjusted net income return on equity by 75 basis points after closing, it strategically reallocates capital to core growth opportunities. The closing is anticipated in 2025.
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