Nationwide Mutual to proceed with buyout of unit - WSJ

Dec 30 (Reuters) - Nationwide Mutual Insurance Co will go ahead with the buyout of its unit Nationwide Financial Services Inc NFS.N at a price struck months before life insurers were hammered by the market turmoil, the Wall Street Journal said.

Nationwide Mutual maintains the deal will benefit its policyholders in the long term despite the higher price it is now paying for the 34 percent of Nationwide Financial it doesn't not own, the paper said, without citing sources. According to the paper, the firm will be able to focus more on delivering financial security to policyholders than on developing high-returning products to please shareholders.

Nationwide Mutual could not be immediately reached for comment.

In August, Nationwide Financial, a provider of life insurance and annuity products, had agreed to a $2.4 billion buyout by its parent, Nationwide Mutual, which had a 66 percent equity stake in the unit.

The agreed price of $52.25 per share was a 12.5 percent premium over Nationwide Financial's close on August 6.

Since then life insurers have been battered by the financial crisis as falling stock markets and freezing credit markets hurt the value of their investments. (Reporting by Eric Yep in Bangalore; Editing by Kazunori Takada)