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Nationwide Mutual Insurance Company (“Nationwide Mutual”) and Harleysville Mutual Insurance Company (“Harleysville Mutual”) and Harleysville Group Inc. (NASDAQ:HGIC) (“Harleysville Group”) announced Thursday they have entered into a definitive agreement under which Harleysville will combine with Nationwide. Under the terms of the agreement, Harleysville Mutual policyholders will become policyholders and members of Nationwide Mutual and Nationwide Mutual will acquire all of the publicly held shares of common stock of Harleysville Group for $60.00 per share in cash.
Joining with the Harleysville companies will further strengthen and diversify Nationwide’s business, expand its distribution footprint, and increase its property and casualty (“P&C”) commercial lines business. The combined organization, which will have an estimated net surplus of more than $13.5 billion and over $16 billion in annual direct written premiums, will be well positioned for growth.
“This combination brings together two best-in-class companies that share a mutual heritage and a focus on meeting the long-term needs of our policyholders,” said Steve Rasmussen, Chief Executive Officer of Nationwide. “With Harleysville’s expertise in commercial lines and Nationwide’s complementary geographic distribution, there will be a substantial opportunity to increase market share, while also providing our combined agents and customers access to a broader portfolio of insurance, financial and banking products.
Insurance Journal magazine reported the combined company will give Nationwide access to new lines of business and more products for its agents and customers. However, there is some concern about how agents and brokers and Nationwide's exclusive agents will interact following the merger.