The transnational firm has announced its plans to sell the unit to Western and Southern Financial Group.
Nestle announced this week that it intends to sell off its Gerber Life Insurance unit. Western and Southern Financial Group has agreed to purchase the life insurance unit for $1.55 billion in cash.
Nestle chose to sell the insurance unit in order to send its attention back to its core businesses.
The transnational company decided to let the Gerber Life Insurance firm go to place its focus back on the consumer health, food and beverage businesses that make up its core. Nestle has been experiencing slowing sales overall. As consumers place a greater preference for healthy foods and whole foods, the giant has been reviewing its own portfolio.
As such, it has been shedding the brands that have been underperforming, while purchasing and launching new brands and products that better suit today’s consumer. Selling the life insurance company was a component of that adaptation to the current demands. Live Insurance News reported the story back in February 2018 when Nestle originally started looking for buyers.
Nestle is angling away from its Gerber Life Insurance and back toward its original focus.
The company released a statement in which it addressed the sale to Western and Southern Financial Group. “This move is part of the ongoing evolution of our portfolio,” said Nestle CEO Mark Schneider within that Swiss-based company statement.
Third Point, a hedge fund, has also been pressuring Nestle to take certain new directions. That hedge fund has requested that Nestle conduct its overhaul in a much bolder and faster way. The largest food group on the world has clearly been listening as it continues to sweep its way through each part of its business. It is clearing away the excess, the poorer performers, in favor of the businesses that have been at its very core for decades.
The sale of the Gerber Life Insurance unit doesn’t come as much of a surprise, said a Reuters report. The company has been seeking a buyer for the unit for the last half-year. As a result of this deal, Western and Southern Financial Group – based in Cincinnati, Ohio – will be able to market their own insurance products under the Gerber Life brand name. That brand’s 2017 annual sales were $856 million.