Food and beverage giant Nestle has reportedly agreed to sell the Gerber Life Insurance Company to the Ohio-based Western & Southern Financial Group in an all-cash deal valued at USD 1.55 billion. As per trusted sources, Gerber Life is a highly recognized and reliable leader in the juvenile and family life insurance business.
As of June 2018, the statutory capital and surplus of Gerber Life was approximately $285 million. Reportedly, the company recorded sales revenue of $856 million in 2017.
According to the terms of the deal, Western & Southern Financial Group can market insurance products under the Gerber Life brand. However, the deal clearly specifies the exclusion of Nestlé’s Gerber Products business, a household brand renowned for its range of baby food and baby care products, which Nestle will continue to own and develop.
Mark Schneider, Chief Executive Officer of Nestle, was quoted saying that the company is delighted to have sold Gerber Life to Western & Southern where it can be a part of larger financial service organization. Schneider further added that the move is part of the ongoing evolution of Nestlé’s portfolio and will enable further investments in the company’s primary food and beverage business as well as consumer healthcare.
According to sources familiar with the development, the agreement has come in the wake of Nestlé’s announcement to explore strategic options for the Gerber Life brand in February 2018. The deal is likely to be closed in late 2018 or early 2019, subject to completion of closing conditions customary and regulatory approvals.
For the record, Gerber Life Insurance Company was established in 1967. The company entirely merged with Sandoz, a Swiss Pharmaceutical company, in 1994. Reportedly, Sandoz eventually merged with another firm to form Novartis.
Nestle acquired Gerber in 2007 from Novartis for $5.5 billion. Presently, the company owns $3.6 million individual life insurance policies with an average value of about $14,000 in death benefits per policy.