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Nationwide Insurance to acquire Harleysville Group for $760m

Nationwide Mutual Insurance has agreed to acquire Harleysville Group for $760m in cash, which will help it to increase its property and casualty (P&C) commercial lines business.

According to Nationwide, the combined organization, which will have an estimated net surplus of more than $13.5bn and over $16bn in annual direct written premiums, will be well positioned for growth.

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 per share in cash.

Nationwide said, Harleysville Mutual would merge into Nationwide Mutual and Harleysville Group, Harleysville Mutual’s publicly traded subsidiary, would be merged with a newly formed subsidiary of Nationwide Mutual. Upon closing, Harleysville Group will be a unit of Nationwide.

As a part of this acquisition, Harleysville’s current headquarters in Pennsylvania will serve as an integral part of the combined company’s national, independent agency-based platform and Michael Browne will become the president and chief operating officer of the Harleysville company.

Bank of America Merrill Lynch and Jones Day advised Nationwide, while Credit Suisse advised Harleysville Mutual and KBW advised Harleysville Group.

The transactions are subject to customary closing conditions and is expected to close in early 2012.