Ohio Casualty Group Closes Acquisition Of Great American Commercial Lines Division
Ohio Casualty Group announced today that its flagship subsidiary, The Ohio Casualty Insurance Co., has closed the acquisition of the Commercial Lines Division of Great American Insurance Co., an insurance subsidiary of the American Financial Group, Inc. The transaction was announced on Sept. 15, 1998.
As part of the agreement, Great American transferred certain commercial lines insurance business to Ohio Casualty in exchange for assumption by Ohio Casualty of net liabilities of $300 million, plus warrants to purchase 3 million shares of Ohio Casualty common stock for a purchase price of $45.01 per share. AFG also will have the opportunity to receive up to an additional $40 million based upon the retention and growth of the acquired insurance business.
The book of business underwritten and serviced by the Great American Commercial Lines Division, with a few exceptions, has been reinsured 100% by Ohio Casualty, pending eventual renewal of Ohio Casualty policies. The major lines of business included in the sale are workers' compensation, commercial multiperil, umbrella and commercial auto.
The acquisition gives Ohio Casualty increased scale for its commercial lines insurance business. Ohio Casualty has acquired in excess of $300 million annual net written premiums from the Great American Commercial Lines Division, bringing annual commercial lines premiums of the combined company close to $900 million. Ohio Casualty also has personal lines premiums of close to $700 million.
Acquisition has been a primary objective for Ohio Casualty during the past year, according to OCG President and Chief Executive Officer Lauren N. Patch. "We are pleased to be closing the transaction and to begin implementation of the integration plans that have been outlined by task forces of associates from both sides," said Patch. "We believe that as the two organizations come together, we will enhance our strategic goals to serve our agents and customers and achieve profitable growth."