Insurers Old Republic, PMA Capital to merge

CHICAGO—Insurers Old Republic International Corp. and PMA Capital Corp. on Thursday said they have entered into a merger agreement in which Old Republic will acquire all of PMA’s outstanding common stock.

Chicago-based Old Republic will issue 0.55 shares of its common stock in exchange for outstanding common shares of Blue Bell, Pa.-based PMA under the terms of the agreement, which was approved by boards of directors for both companies. The exchange ratio may be adjusted, the two companies said in a statement.

The initial exchange ratio represents a premium of approximately 15% of the closing price of PMA’s common stock on June 8, the last trading day before the signing of the merger agreement. The transaction is expected to close during the third quarter of this year and is subject to approval by PMA’s shareholders and regulatory approvals.

“This merger is consistent with our long-term strategic plan to grow our general insurance business,” said Al Zucaro, Old Republic chairman and CEO, in a statement. “The two companies share a commitment to conservative underwriting and a focus on select industries important to the American economy.”