OneAmerica Financial Partners Inc. has signed a letter of intent to acquire Virginia-based Shenandoah Life Insurance Co.
Shenandoah would become a subsidiary of Indianapolis-based OneAmerica, whose other subsidiaries include American United Life Insurance Co. and The State Life Insurance Co.
OneAmerica disclosed no details about the financial terms of the deal. Shenendoah is much smaller than OneAmerica - $1.9 billion in assets versus $19.9 billion.
Completion of the merger is expected in mid-2009 after approval of the transaction by eligible policyholders of both companies, and federal and state regulatory authorities.
OneAmerica has been looking for acquisitions in recent years. It found itself in a good position to buy because, unlike many life insurers, it avoided major losses in the recent turmoil on Wall Street.
"This proposed merger would bring together two historically strong companies that share a deep commitment to policyholders and mutual company values," said OneAmerica Chairman, President and CEO Dayton H. Molendorp in a prepared statement. "OneAmerica's financial strength, as reflected by its A.M. Best, Standard & Poor's and Moody's ratings, offers Shenandoah Life the opportunity to expand its core business."
The letter of intent proposes that Shenandoah Life would remain a distinct insurance company with significant operations and growth opportunities in Roanoke, Va. Shenandoah Life policyholders would have no change in policy benefits and or agent services. Upon completion of the proposed merger, Shenandoah Life eligible policyholders would be members of OneAmerica with full voting rights.