It took plenty of back-and-forth, counter-offers and more, but American Financial Group has finally reached an agreement to buy the rest of National Interstate Corp. that its subsidiary does not already own.
Great American Insurance Company’s initial offer in March for 49 percent of National Interstate Corp. was worth $293 million. The final, winning bid is valued at $320 million, based on a $32 per share purchase price plus $0.50 special dividend. (Great American is an AFG subsidiary.)
Plans call for closing the M&A agreement in the 2016 fourth quarter. Both companies are based in Ohio.
As part of the deal National Interstate and its subsidiaries become members of the American Financial Group consolidated tax group. This benefits AFG to the tune of a $64 million non-core tax benefit at the time the transaction is consummated.
While National Interstate Corp.’s board of directors agreed to the sale, shareholders must still sign off on the measure.
American Financial generally focuses on property/casualty insurance and specialized commercial products for business. National Interstate is a holding company for a specialty property/casualty insurance group focused on niche markets.
“The purchase of the remaining National Interstate Shares enables us to make an additional investment in a business we know well, while at the same time simplifying the ownership structure,” AFG Co-Chief Executive Officer Carl Linder III said in prepared remarks.
Anthony Mercurio, National Interstate’s President and CEO, said that AFG and Great American have been part of a “deep relationship” that National Interstate values.
“Given that longstanding relationship, we are excited about National Interstate’s future as a fully-owned subsidiary within AFG’s family of companies,” Mercurio said in prepared remarks.
Sources: American Financial Group, National Interstate Corp.