Harleysville Mutual Insurance Company said Wednesday that its policyholders as well as shareholders at its publicly traded subsidiary Harleysville Group Inc. voted to approve the proposed merger with Nationwide Mutual Insurance Company.
The proposed merger, first announced in September 2011, now has the approval from policyholders and stakeholders from both companies. Nationwide policyholders already voted to approve the deal on April 9.
Regulators in Pennsylvania, where Harleysville is headquartered, also approved the deal earlier this month — with a condition that for a period of three years, Nationwide cannot close, re-domesticate or cease business activity from the corporate offices in Harleysville or any other office located in Pennsylvania without the regulators’ approval.
The next step is securing approval from regulators in Ohio, Michigan and New Jersey. The companies anticipate completing the transaction sometime in the second quarter pending approval.
“We very much appreciate the overwhelming endorsement of both our policyholders and shareholders in approving the merger with Nationwide,” Harleysville CEO Michael L. Browne said.
“The combination of Harleysville and Nationwide represents a strong strategic business fit that makes sense for both organizations,” Browne said.
“As partners within the Nationwide family of companies, Harleysville and Allied Insurance (a Nationwide unit overseeing the company’s independent agency system) will establish a national independent agency distribution network, bringing together a wealth of talent and expertise in the marketplace.”
Harleysville distributes its products exclusively through a network of independent agents primarily across 32 states.
Harleysville stated that at a special meeting of Harleysville Mutual policyholders, 14.1 percent of eligible votes were cast, and 87.4 percent of the votes were cast in favor of the merger. At a special meeting of Harleysville Group shareholders, 89.9 percent of eligible votes were cast, and 99.8 percent of the votes were cast in favor of the merger.
The merger of insurer Nationwide Mutual with regional carrier Harleysville Mutual has been described as a growth strategy for the companies and also for their independent agents — but the deal has not been free from criticism.
Under the deal, Harleysville Mutual policyholders will become policyholders and members of Nationwide Mutual, and Nationwide will acquire all of the publicly held shares of common stock of Harleysville Group for $60.00 per share in cash.