Cedar Rapids, Iowa-based United Fire & Casualty Co. said it has the necessary approvals from state regulators and company shareholders to complete its acquisition of Mercer Insurance Group Inc.
United Fire announced in November plans to buy Pennington, N.J.-based Mercer for $191 million cash.
United Fire said approvals have come from the California Department of Insurance, the New Jersey Department of Banking and Insurance, and the Pennsylvania Department of Insurance.
In addition, Mercer’s stockholders voted to approve the deal, which is expected to close by March 31.
Shares of United Fire fell 46 cents, or 2.4 percent, to close Wednesday at $19.09. Shares of Mercer Insurance rose 7 cents to close at $28.22, a 52-week high.
United Fire offered $28.25 per share for Mercer, which was a 50 percent premium over the $18.86 price the shares were trading for on the day of the offer.
It wants to buy Mercer because the companies’ agent networks are concentrated in different parts of the country. The post-merger United Fire will market through 1,400 agents, up from 800 in its existing agent network. That will boost its sales. The company expects the deal to increase its net income by 2012.
United Fire also will spread its risk with the acquisition, making the company less vulnerable to catastrophes such as severe storms in areas where it has written a lot of policies.
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