StanCorp Financial Group (the Standard), the US arm of Japan’s Meiji Yasuda Life Insurance, has agreed to acquire Allstate‘s Employer Voluntary Benefits business in all all-cash deal valued at around $2bn (Y293.94bn).
This move is expected to significantly enhance the Standard’s growth and competitive stance in the US employee benefits market.
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Completion of the deal is anticipated in H1 2025, contingent on the receipt of regulatory clearances and other standard closing conditions.
Once the deal is complete, the Standard will integrate Allstate’s Employer Voluntary Benefits business, including its employees and operations, into its existing structure.
The acquisition aligns with Allstate’s plan to unlock the growth potential of its Health & Benefits businesses, comprising Employer Voluntary Benefits, Individual and Group Health, by partnering with companies with complementary capabilities.
Additionally, the deal will initiate a product distribution partnership between the two companies.
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By GlobalDataAs part of this collaboration, the Standard will become the exclusive provider for a range of products distributed by Allstate’s agents, such as group life and disability insurance.
The Standard president and CEO Dan McMillan said: “We see significant synergies between Allstate’s industry-leading supplemental and voluntary life products and the Standard’s expertise in workplace benefits.
“This transaction enhances our suite of offerings for customers of all sizes. We look forward to welcoming the talented Allstate Employer Voluntary Benefits employees to the Standard and to a mutually beneficial distribution partnership as we move forward.”
Advising the Standard on this transaction are Citi, serving as the exclusive financial advisor, and Debevoise & Plimpton as legal counsel.
Allstate engaged J.P. Morgan and Ardea Partners for financial advice, with Willkie Farr & Gallagher providing legal advice.
Both the Standard and Allstate are recognised as key players in the workplace benefits sector, known for their expertise in benefits administration.
The Standard, established in 1906, has a long-standing history in the employee benefits space, while Allstate’s Employer Voluntary Benefits business offers supplemental workplace benefits.
For H1 2024, the Allstate businesses in question reported revenues of $535m, an adjusted net income of $45m, and statutory capital and surplus of $255m.
Allstate chief financial officer Jess Merten said: “The sale is expected to generate a gain of about $600m and increase deployable capital by $1.6bn.
“Adjusted net income return on equity will decline by about 100 basis points following the sale, which is expected in the first half of 2025.”
