Old Republic International Corp (ORI) will acquire PMA Capital Corp. in a $228 million stock deal expected to help Old Republic build its general insurance business.

PMA is a holding company that provides workers' compensation and commercial property and casualty insurance. The deal calls for Old Republic to issue 0.55 share for each share of PMA. Each share of PMA is valued at $7.10, a 16% premium to Wednesday's closing price.

The purchase is expected to close in the third quarter and includes the assumption of $137 million in PMA debt.