Nestlé has agreed to sell its subsidiary, Gerber Life Insurance, to Western & Southern Financial Group for $1.55bn.
Gerber Life Insurance will be added to Western & Southern’s family of financial services businesses.
The acquisition also includes long-term license to use Gerber Life intellectual property related to financial services.
The transaction is subject to customary closing conditions including the approval from New York regulatory authorities.
Gerber Life Insurance is brand known in the juvenile and family life insurance market, with a capital and surplus of about $285m, as of 30 June, this year. Last year, the company had sales of $856m.
The acquisition allows Western & Southern Financial to sell insurance products under the Gerber Life brand.
Western & Southern stated that its market will expand due to this acquisition, where it will tap into Gerber Life’s $52bn life insurance in force and 3.6 million individual life policies.
Upon completion of the acquisition, Western & Southern’s assets under management will be nearly $77.1bn.
Western & Southern Financial Group chairman, president and CEO John Barrett said: “We are delighted to welcome Gerber Life to our family. This iconic and trusted consumer brand is a compelling fit for Western & Southern, which has always been a human institution serving human needs with tailored financial solutions that are easy for our clients to understand.
“Our two companies share a common mission of providing financial strength and security to the ones we love. Having a long-term relationship with a venerable company like Nestlé that has similar values was an important aspect in our acquisition of Gerber Life.”
Gerber Life Insurance has a workforce of more than 500 associates who are distributed across is its headquarters in New York and an operations center in Fremont, Michigan. Presently, all of the workforce will remain in place.
The transaction does not include Nestlé’s Gerber Products business, a brand developing baby food and baby care.
Nestlé CEO Mark Schneider said: “We are delighted to have found an outstanding new home for Gerber Life at Western & Southern, where it will flourish as part of a larger financial services organization. This move is part of the ongoing evolution of our portfolio. It will allow us to invest further in our core food and beverage business and in consumer healthcare.”
The transaction follows Nestlé announcment in February this year that it is exploring options for Gerber Life business.