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A Midwestern Life and Annuity Issuer May Go Private

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A property and casualty insurer that’s closely related to FBL Financial Group wants to help buy out the other shareholders and take FBL Financial private.

The P&C carrier, Farm Bureau Property & Casualty Insurance Company, said Friday that its board has offered to pay a total of $440 million, or $47 per share, for the shares of FBL Financial common stock that are not owned by Farm Bureau P&C or by the Iowa Farm Bureau Federation.

Farm Bureau Financial is best known as an annuity issuer. It also writes term life insurance, whole life insurance and universal life insurance. The company’s shares trade on the New York Stock Exchange under the stock symbol FFG.

The Farm Bureau P&C board wants FBL Financial’s business to “continue to be run in a manner that is generally consistent with its current operations, while enjoying the operational benefits and cost savings inherent in FFG no longer being a public company,” the Farm Bureau P&C board says in a public letter sent to FBL Financial’s board.


  • Links to documents related to the Farm Bureau Property & Casualty proposal are  available here.
  • An article about FBL’s earnings is available here.

“We do not currently contemplate making any material changes in FFG’s strategic or operating philosophy, or to its business.” the Farm Bureau P&C board says.

The Companies.

Farm Bureau P&C is a West Des Moines, Iowa-based subsidiary of Farm Bureau Mutual Holding Company, and an affiliate of the Iowa Farm Bureau Federation. It was founded 1939. It now provides coverage for 360,000 clients and members. Farm Bureau P&C still operates as a private company. It files quarterly and annual reports with state insurance regulators, but it does not have to file financial reports with the U.S. Securities and Exchange Commission.

The Farm Bureau group formed Farm Bureau Life Insurance Company, as Iowa Life Insurance Company, in 1944.

The Farm Bureau group created FBL Financial in 1993, then put Farm Bureau Life, and two other Farm Bureau-affiliated insurance companies into FBL Financial. FBL Financial sold stock to the public and became a publicly traded company in July 1996.

Today, the Iowa Farm Bureau Federation owns about 60% of FBL Financial’s Class A common stock and about 67% of the company’s Class B common stock.

The Iowa Farm Bureau Federation, Farm Bureau P&C, and FBL Financial all have their main offices at 5400 University Ave. in West Des Moines.

The organization markets both P&C and life and annuity products under the Farm Bureau Financial Services brand name.

FBL Financial reported $26 million in net income for the second quarter on $201 million in revenue.

FBL Financial’s Stock

FBL Financial stock was selling for more than $50 per share between late 2014 and early 2020, when the COVID-19-related lockdown rules rolled in. FBL Financial’s share price peaked at more than $84 in June 2018.

The COVID-19 pandemic, and the low interest rates associated with the pandemic, have hit FBL Financial’s stock price hard. Shares have been selling for less than $40 each most days since mid-March.

The Deal

The Farm Bureau P&C board says in the public deal offer letter that it can pay FBL Financial’s investors a good price quickly because it already knows FBL Financial well.

The Farm Bureau P&C board says it expects FBL Financial to form a special committee made up of “non-management directors not affiliated with” either Farm Bureau P&C or the Iowa Farm Bureau Federation to review the deal proposal and make a recommendation to the FBL Financial board.

“We will not move forward with the transaction unless it is approved by a special committee,” the Farm Bureau P&C board says.

To go forward, the deal also must be approved by a majority of the FBL Financial shares not owned by Farm Bureau P&C, the Iowa Farm Bureau Federation, or those organizations’ executives or directors, according to the Farm Bureau P&C board.

The Iowa Insurance Division is the regulatory agency in charge of reviewing the deal.

The Farm Bureau P&C board says the Iowa Farm Bureau Federation is supporting Farm Bureau P&C’s efforts to buy other investors’ FBL Financial shares, but that the Iowa federation itself has no interest in selling its own FBL Financial stock, or in supporting any alternative FBL Financial sale or merger.

The Farm Bureau P&C board says the expression of interest described in the letter is non-binding.

FBL Financial’s Reaction

FBL Financial has responded with a press release emphasizing that the Farm Bureau P&C proposals is non-binding.

“The company cautions its shareholders and others considering trading in the company’s securities that the company only recently received the proposal and that the company’s board of directors has not made any decision with respect to the company’s response to the proposal,” FBL Financial says.

— Read Daniel Pitcher to Lead FBL, on ThinkAdvisor.

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