Intercargo To Merge With EXEL

Intercargo Corp. said it has signed a definitive agreement to merge with a U.S. subsidiary of EXEL Ltd. for $12 per share, or approximately $88 million. The transaction is subject to approval by Intercargo's shareholders, regulatory approvals and customary closing conditions and is expected to close early in 1999. Intercargo's largest shareholder Orion Capital Corp., has agreed to vote all of its shares in favor of the transaction.

Intercargo Corp., headquartered in Schaumburg, IL, through its subsidiaries underwrites specialty insurance products for companies engaged in international trade, including U.S. Customs bonds and marine cargo insurance. On Sept. 30, 1998, Intercargo had total assets of $165 million and shareholders' equity of $81 million.

"Intercargo, with 48 state licenses, represents an ideal platform for EXEL to continue the expansion of its North American business operations," stated Brian M. O'Hara, president and chief executive officer of EXEL. "We are pleased to have found a company that fits our strategic expansion plans for this important market."

Upon completion of the transaction, Intercargo will operate in coordination with EXEL's The Brockbank Group PLC (Brockbank). Stan Galanski will continue as president and CEO and Robert Lynyak as chief underwriting officer of Intercargo. In addition to its current business focus on international trade and contract surety, the company will underwrite business produced by Brockbank's satellite and marine insurance as well as business from other EXEL subsidiaries.

"I am pleased that EXEL has agreed to acquire Intercargo," noted Mark E. Brockbank, chief executive of Brockbank. "It will enable us to build on the valuable contacts that we have in North America and significantly grow our business in an important market."