Nationwide Mutual Insurance Co. welcomed Pennsylvania regulators’ approval this week of the insurer’s proposed merger with Harleysville Mutual Insurance Co.
Regulatory approval from Pennsylvania, where Harleysville is headquartered, was one of the requirements for completing the merger.
“Nationwide is pleased with the progress being made toward completing the proposed mergers,” Nationwide spokesman Joe Case told Insurance Journal.
“We anticipate closing sometime in the second quarter pending approval by other state regulators and Harleysville.”
Earlier this month, Columbus, Ohio-headquartered Nationwide also took another step toward completing the deal when Nationwide Mutual policyholders approved the deal on April 9. Approval for the mutual merger transaction was required from two-thirds of Nationwide Mutual’s policyholders who voted in person or by proxy at the special meeting.
Nationwide and Harleysville also need approval from a majority of Harleysville Mutual members as well as from regulators in Ohio, Michigan and New Jersey before the merger can be finalized. Harleysville, headquartered in Harleysville, Penn., is scheduled to hold a special meeting later this month for its policyholders to vote on the merger.
The two insurers first announced the merger in September 2011 and said the two companies are a perfect match for each other. The companies earlier told Insurance Journal that the merger of insurer Nationwide Mutual with regional carrier Harleysville Mutual is all about growth, not only for the companies but also for their independent agents.
In his announcement on April 16, Pennsylvania Insurance Commissioner Mike Consedine said the merger application has been approved and that this combined entity “will have a greater statewide presence and offer more product selection to consumers.”
“Harleysville and Nationwide have complementary product lines, and together the companies offer more choices to policyholders,” Consedine said. “I also applaud Nationwide’s decision and commitment to preserve the Harleysville culture and to keep jobs here in Pennsylvania.”
Under the terms of the order from the Pennsylvania Insurance Department, Harleysville Mutual policyholders will become policyholders and members of Nationwide Mutual. In turn, Nationwide is acquiring all of the publicly held shares of common stock of Harleysville Group. Public stockholders of Harleysville Group will receive $60 per share in cash.
The order also states that for a period of three years, Nationwide cannot close, re-domesticate or cease business activity from the corporate office in Harleysville or any other office located in Pennsylvania without the department’s approval. Harleysville will continue to write business under the Harleysville brand for at least two years.
Pennsylvania Insurance Department said it evaluated the proposal against a set of statutory standards, including whether the transaction is in the public interest, will lessen competition, or be hazardous to the insurance-buying public. Standards also focused on financial solvency; the competence, experience, and integrity of company management; the fairness and reasonableness of any changes in business operations, as well as compliance with state laws.