National Interstate, Great American Insurance enter merger deal
Staff Writer |
National Interstate Corporation has entered into a definitive agreement with Great American Insurance Company, a wholly-owned subsidiary of American Financial Group.
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Great American will acquire the approximately 49% of the National’s issued and outstanding common shares that Great American does not presently own.
The merger is an all-cash transaction that values the National 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 and 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% to the company’s closing stock price on March 4, 2016, the last trading day before American Financial Group (AFG), Great American’s parent company, announced that Great American was proposing to acquire all of the outstanding common shares of National Interstate that Great American did not already own.
National Interstate board has unanimously approved the proposed merger based upon the unanimous recommendation of a Special Committee.
The proposed merger is expected to close in the fourth quarter of 2016, subject to approval by the company’s shareholders, as well as the satisfaction or waiver of customary closing conditions. ■