National Interstate To Be Acquired By American Financial Group Unit

(RTTNews) - National Interstate Corp. (NATL) said it has agreed to be acquired Great American Insurance Co., a wholly-owned subsidiary of American Financial Group, Inc. (AFG).

Under the deal, 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 the company at about $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.

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 43.7 percent premium to the company's closing stock price on March 4, 2016.

National Interstate's board of directors has unanimously approved the proposed merger. The company's Special Committee and the Board have each recommend that the company's shareholders adopt the merger agreement.

The proposed merger is expected to close in the fourth quarter of 2016, subject to approval by the company's shareholders, including approval by a majority of the company's shareholders other than Great American.

American Financial Group said in a separate statement that the purchase price to acquire the National Interstate shares not currently owned by Great American will be about $320 million. The proposed transaction will not be subject to a financing condition.

The proposed transaction would allow National Interstate and its subsidiaries to become members of the AFG consolidated tax group, which would result in a non-core tax benefit of about $64 million to AFG at the time the transaction is consummated.