National Western and Prosperity Life Group Announce $1.9 Billion Cash Merger

National Western Life Group, Inc. (“National Western”) and Prosperity Life Group have recently announced a definitive Merger Agreement, marking a significant milestone in the expansion of their insurance businesses. Under the agreement, S. USA Life Insurance Company, Inc., an affiliate of Prosperity Life Group, will acquire National Western in an all-cash transaction valued at approximately $1.9 billion.

The merger agreement states that each issued and outstanding share of National Western common stock will be converted into the right to receive $500 in cash at the closing of the merger. This represents an 87.1% premium to the unaffected Class A Common Stock share price on May 16, 2023, and an 11.8% premium over National Western’s 30-day volume-weighted average price as of October 6, 2023.

The merger has received unanimous approval from National Western’s Board of Directors. Nicholas von Moltke, President and CEO of Prosperity Life Group, expressed excitement about the acquisition, stating that National Western’s capabilities will complement their ambition to deliver a compelling value proposition to policyholders.

Ross R. Moody, Chairman and CEO of National Western, also expressed enthusiasm, highlighting the transaction’s immediate value for stockholders at an attractive premium. The merger is expected to close in the first half of 2024, subject to customary closing conditions, including approval by National Western’s stockholders, antitrust clearance, and receipt of insurance regulatory approvals.

National Western stockholders representing approximately 29.7% of the total voting power of the company’s common shares have already executed voting and support agreements with S. USA Life Insurance Company, Inc., committing to vote in favor of the Merger Agreement.

The merger consideration will be funded through a combination of cash from internal sources, a capital commitment from affiliates of Elliott Investment Management L.P., and borrowing under existing facilities or debt commitments. The completion of the merger is not conditioned on the receipt of financing by Prosperity Life Group or its affiliates.

Citi is serving as financial advisor and Debevoise & Plimpton LLP as legal advisor to Prosperity Life Group and SUSA, while Goldman Sachs & Co. LLC is serving as financial advisor and Sidley Austin LLP as outside M&A counsel to National Western.

National Western Life Group, Inc. is the parent organization of National Western Life Insurance Company and Ozark National Life Insurance Company, offering a broad portfolio of individual universal life, whole life, and term insurance plans, as well as annuity products. Prosperity Life Group is an innovative insurance, reinsurance, and asset management company with underwriting company affiliates that have been serving individuals and families since 1916.

The merger between National Western and Prosperity Life Group represents a strategic move that will enhance their collective capabilities and provide greater value to policyholders. Both companies are excited about the future prospects of this partnership and look forward to the successful completion of the merger.