Nationwide to buy Harleysville for $1.63 billion
(Reuters) - Nationwide Mutual Insurance Co <NMUIC.UL> said it will acquire Harleysville Group <HGIC.O> for $1.63 billion 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 Harleysville, 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. 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, which is actually the parent of Harleysville Group, 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.
(Reporting by Ben Berkowitz in New York; editing by John Wallace)