Owners Of Factory Mutual To Merge

N/Ards of directors of Allendale Mutual Insurance Co. (Johnston, RI), <%=company%> (Waltham, MA) and Protection Mutual Insurance Co. (Park Ridge, IL) have expressed their intention to merge all three companies. The merger is subject to regulatory and policyholder approvals and is expected to become effective Jan. 1, 1999.

The three companies jointly own Factory Mutual, a leader in property loss prevention engineering and research, and London-based FM Insurance Co. Ltd. Both of these companies will be integrated into the newly merged company, which will be named Factory Mutual Insurance Company (FM Insurance Company).

William J. Poutsiaka, Arkwright's president and chief executive officer, stressed that the proposed union is beneficial to customers and employees of the three companies and their subsidiaries. "The bottom line is that, by joining forces, we are able to offer our customers the cost-effective, higher-quality products and services they are demanding.

FM Insurance Company will have assets of $5.3 billion and policyholder's surplus of $2.3 billion.

Current Arkwright Director John A. Luke Jr., chairman, president and CEO of Westvaco Corp., New York, NY, will chair the board of directors of the merged organization. The board of directors will include six outside directors from each of the three companies. Shivan Subramaniam, chairman, president and CEO of Allendale Mutual will be chief executive officer; Jim Black, Protection Mutual's president and CEO will be chief operating officer. While Poutsiaka was instrumental in initiating the merger, he will not be affiliated with the new organization.