Iowa-based insurer United Fire & Casualty will acquire New Jersey-based Mercer Insurance Group in a deal valued at $191 million
The merger, which is expected to close in the first quarter of 2011, calls for Mercer shareholders to receive $28.25 for each share of common stock — a premium of nearly 50 percent of Mercer’s current share price.
The combined companies had $605 million in net written premium last year — more than 90 percent of that total in commercial lines.
Randy A. Ramlo, president and chief executive officer of United Fire, said the company “has been looking to enter the Mid-Atlantic and West Coast markets for years because of the potential to diversify our risk profile and increase the scale of our operations. Mercer Insurance has a long track record of operating profitably in these markets, and we are very pleased that the company and its employees, agents and policyholders will be joining the United Fire family.”
The companies share no overlap in their geographic distribution, as Mercer Insurance primarily markets in six Western and Mid-Atlantic states in which United Fire has no appointed property casualty agencies.
Upon closing of the deal, United Fire will sell through approximately 1,400 independent agents in 24 states.
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