Nationwide Mutual Insurance Company and Nationwide Financial Services, Inc. Reach Agreement to Combine in $2.4 Billion Transaction

Nationwide Mutual Insurance Company ("Nationwide”) and Nationwide Financial Services, Inc. ("NFS”) (NYSE: NFS) today announced that they have entered into a definitive agreement for Nationwide to acquire all of the outstanding publicly held Class A common stock of NFS for $52.25 per share in cash. Nationwide currently owns all of the outstanding NFS Class B common stock, which represents 66.3% of the equity ownership and 95.2% of the combined voting power of the shareholders of NFS. The transaction is valued at approximately $2.4 billion and is expected to close by the end of 2008 or early in 2009, subject to shareholder and regulatory approval. While the transaction is subject to the vote of the holders of a majority of the outstanding shares of Class A and Class B common stock of NFS, Nationwide and certain of its affiliates have agreed to vote all of their NFS shares in favor of the transaction, assuring that shareholder approval will be obtained. Upon completion of the transaction, NFS will become a wholly-owned subsidiary of Nationwide. The $52.25 per share offer represents a premium of approximately 38% over the closing price of NFS stock of $37.93 on March 7, 2008, the last trading day prior to disclosure of Nationwide's original proposal to acquire all outstanding publicly held Class A common stock of NFS, and an increase of approximately 11% over Nationwide's original proposal of $47.20 per share. "Combining the organizations will allow the Nationwide brand to set itself apart from the competition by aligning our entire product and service portfolio around the customer,” said Nationwide chief executive officer Jerry Jurgensen. "A simpler ownership structure will open new opportunities for stronger top-line growth by attracting new customers as well as retaining current customers with a broad and integrated product offering. It will also facilitate more effective deployment of capital across the enterprise, putting more assets to work where they can deliver the best value for customers.” "While NFS’ current structure has served us well over the past decade, our ability to grow and meet the needs of our customers over the next decade and beyond will benefit from a simpler and more customer-centric business model,” said Mark Thresher, president and chief operating officer of NFS. "We believe that this transaction will create great benefits for our customers, business partners and associates, under terms that provide fair value for the public shares. In light of the difficult economic and capital markets environment, we were particularly pleased that the price represents an attractive premium to Nationwide’s original proposal.” NFS Special Committee On March 10, 2008, NFS disclosed that it had received a proposal from Nationwide to acquire all outstanding publicly held shares of NFS Class A common stock for $47.20 per share in cash. NFS’ board of directors formed a special committee of independent directors not affiliated with Nationwide to evaluate the proposal. The transaction was recommended by the special committee and approved by NFS’ board of directors. Financial and Legal Advisors Nationwide’s financial advisors on the transaction are UBS Investment Bank and Goldman Sachs and its legal counsel is Jones Day. Legal counsel for NFS is Dewey & LeBoeuf LLP. Lazard is acting as financial advisor to the special committee of the NFS board and Sidley Austin LLP is acting as the special committee’s legal counsel. Conference Call and Webcast Information NFS will host a conference call on Thursday, August 7, 2008 at 8:30 a.m. EDT to discuss the transaction, as well as NFS’ second quarter financial results, also released today. The dial-in number is 412-858-4600 and the conference ID is NFS 2Q Earnings Call. The call can also be accessed via webcast in the Investor Relations area of the Company’s web site at www.nationwide.com. A replay of the conference call will be available beginning at noon on Thursday, August 7 by dialing 412-317-0088. The passcode for the replay is 421065. About Nationwide® Nationwide, based in Columbus, Ohio, is one of the largest diversified insurance and financial services organizations in the world, with more than $161 billion in assets. Nationwide ranks #108 on the Fortune 500 list.1 The company provides a full range of insurance and financial services, including auto, motorcycle, boat, homeowners, life, commercial insurance, administrative services, annuities, mortgages, mutual funds, pensions, long-term savings plans and health and productivity services. For more information, visit www.nationwide.com. About Nationwide Financial® Nationwide Financial Services, Inc. (NYSE: NFS), a publicly traded company based in Columbus, Ohio, provides a variety of financial services that help consumers invest2 and protect their long-term assets, and offers retirement plans and services through both public- and private-sector employers. It’s part of the Nationwide group of companies, which offers diversified insurance and financial services. To obtain investor materials, including the Company's 2007 Annual Report to Shareholders, 2007 Annual Report on Form 10-K, quarterly statistical supplements and other corporate announcements, please visit the investor relations section of the Company's Web site at www.nationwide.com. Nationwide, Nationwide Financial, the Nationwide Framemark and On Your Side are federally registered service marks of Nationwide Mutual Insurance Company. FORWARD-LOOKING STATEMENTS Certain statements in this report regarding the proposed Merger constitute "forward-looking statements” under the federal securities laws. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated or projected, forecast, estimated or budgeted in such forward-looking statements include, among other, the following possibilities: (i the NFS’ primary reliance, as a holding company, on dividends from its subsidiaries to meet debt service obligations and the applicable regulatory restrictions on the ability of the NFS’ subsidiaries to pay such dividends; (ii) the potential impact on the NFS’ reported net income and related disclosures that could result from the adoption of certain accounting and/or financial reporting standards issued by the Financial Accounting Standards Board, the United States Securities and Exchange Commission (the "SEC”) or other standard-setting bodies; (iii) tax law changes impacting the tax treatment of life insurance and investment products; (iv) repeal of the federal estate tax; (v) heightened competition, including specifically the intensification of price competition, the entry of new competitors and the development of new products by new and existing competitors; (vi) adverse state and federal legislation and regulation, including limitations on premium levels, increases in minimum capital and reserves and other financial viability requirements, restrictions on mutual fund distribution payment arrangements such as revenue sharing and 12b-1 payments, and regulation changes resulting from industry practice investigations; (vii) failure to expand distribution channels in order to obtain new customers or failure to retain existing customers; (viii) inability to carry out marketing and sales plans, including, among others, development of new products and/or changes to certain existing products and acceptance of the new and/or revised products in the market; (ix) changes in interest rates and the equity markets causing a reduction of investment income and/or asset fees, an acceleration of the amortization of DAC and/or value of business acquired, reduction in separate account assets or a reduction in the demand for NFS’ products; (x) reduction in the value of NFS’ investment portfolio as a result of changes in interest rates and yields in the market as well as geopolitical conditions and the impact of political, regulatory, judicial, economic or financial events, including terrorism, affecting the market generally and companies in NFS’ investment portfolio specifically; (xi) general economic and business conditions that are less favorable than expected; (xii) competitive, regulatory or tax changes that affect the cost of, or demand for, NFS’ products; (xiii) unanticipated changes in industry trends and ratings assigned by nationally recognized rating organizations; (xiv) settlement of tax liabilities for amounts that differ significantly from those recorded on the balance sheet; (xv) deviations from assumptions regarding future persistency, mortality (including as a result of the outbreak of a pandemic illness, such as Avian Flu), morbidity and interest rates used in calculating reserve amounts and in pricing NFS’ products; (xvi) adverse litigation results and/or resolution of litigation and/or arbitration, investigation and/or inquiry results that could result in monetary damages or impact the manner in which NFS conducts its operations; and (xvii) adverse consequences, including financial and reputation costs, regulatory problems and potential loss of customers resulting from failure to meet privacy regulations and/or protect NFS’ customers’ confidential information. ADDITIONAL INFORMATION In connection with the proposed transaction, NFS will file a proxy statement with the SEC. Before making any voting or investment decision, investors and security holders of NFS are urged to carefully read the entire proxy statement, when it becomes available, and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information about the proposed transaction. A definitive proxy statement will be sent to the stockholders of NFS in connection with the transaction. Investors and security holders may obtain a free copy of the proxy statement (when available) and other documents filed by NFS at the SEC’s website at http://www.sec.gov. The proxy statement and such other documents may also be obtained for free from NFS by directing such request to Mark Barnett - Vice President, Investor Relations, Nationwide Financial Services, Inc., One Nationwide Plaza, Columbus, Ohio, 43215. PARTICIPANTS IN THE SOLICITATION NFS, its directors, executive officers and other members of its management, employees, and certain other persons may be deemed to be participants in the solicitation of proxies from NFS’ stockholders in connection with the transaction. Information about the interests of participants in the solicitation will be set forth in the proxy statement relating to the Merger when it becomes available. 1 Fortune Magazine, April 2008 2 Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svcs. Corporation. Nationwide Mutual Insurance Company and Affiliated Companies, Home Office: Columbus, OH 43215-2220