(Reuters) - Nationwide Mutual Insurance Co NMUIC.UL said it will acquire Harleysville Group HGIC.O for $760 million to expand its reach in commercial insurance lines of business.
Nationwide, one of the country’s largest home and auto insurers, will pay $60 a share in cash for the Harleysville shares not already held by its parent, Harleysville Mutual. That is nearly a 100 percent premium to the stock’s Wednesday close and nearly a 140 percent premium to the stock’s price before rumors of a deal hit the market last week.
Harleysville Mutual policyholders will become customers of Nationwide Mutual after the two businesses merge. The Harleysville brand will continue to exist after the deal closes, the companies said in announcing the deal on Thursday.
Closing is expected in early 2012. Harleysville Mutual has committed to voting its 54 percent stake in favor of the deal, ensuring its approval.
Bank of America Merrill Lynch and Jones Day advised Nationwide, while Credit Suisse advised Harleysville Mutual and KBW advised Harleysville Group.
(Corrects to reflect that Nationwide is buying only the shares not held by Harleysville Mutual, and adjusts deal value accordingly)
Reporting by Ben Berkowitz in New York; editing by John Wallace