Great American Insurance to Acquire National Interstate Corporation

July 25, 2016

National Interstate Corp. (National Interstate), based in Richfield, Ohio, announced it has agreed to be acquired by Great American Insurance Co. (Great American), a wholly-owned subsidiary of American Financial Group Inc. (AFG).

Under the terms of the agreement, Great American will acquire the approximately 49 percent of the company’s issued and outstanding common shares that Great American does not presently own.

The merger is an all-cash transaction that values National Interstate at approximately $660 million, including assumption of debt in connection with the merger.

National Interstate is the holding company for a specialty property/casualty insurance group which offers products and services designed to meet the unique needs of niche markets.

Great American is a property/ casualty insurance company, focusing on specialty commercial products for businesses, and in the sale of traditional fixed and fixed-indexed annuities in the retail, financial institutions and education markets.

Under the terms of the proposed merger, National Interstate shareholders will receive $32.00 in cash for each share of National Interstate common stock they hold. In addition, National Interstate will pay a special dividend of $0.50 per common share upon the closing of the merger. This represents a premium of approximately 43.7 percent to the National Interstate’s closing stock price on March 4, 2016, the last trading day before AFG announced that Great American was proposing to acquire all of the outstanding common shares of National Interstate that Great American did not already own.

The proposed merger is expected to close in the fourth quarter of 2016, subject to approval by the Great American shareholders and regulatory authorities, as well as the satisfaction or waiver of customary closing conditions.

Morgan Stanley & Co. LLC is acting as financial advisor to the special committee, and Willkie Farr & Gallagher LLP is acting as its legal advisor.

Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Great American.

National Interstate will file a current report on Form 8-K with the U.S. Securities and Exchange Commission (SEC) containing a summary of terms and conditions of the proposed merger.

National Interstate Corp. was founded in 1989. Insurance subsidiaries include the three primary insurers, National Interstate Insurance Co., Vanliner Insurance Co. and Triumphe Casualty Co.

Source: National Interstate Corp.

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