COLUMBUS, Ohio and INDIANAPOLIS, Indiana -- October 25, 2000 -- State Auto Financial Corporation of Columbus, Ohio, (Nasdaq:STFC) and Meridian Insurance Group, Inc. (Nasdaq:MIGI) of Indianapolis, Indiana, jointly announced today that their principal stockholders, State Automobile Mutual Insurance Company (State Auto) and Meridian Mutual Insurance Company (Meridian Mutual), have agreed to merge the two mutual companies. In addition, outstanding publicly owned shares of MIGI are to be purchased by State Automobile Mutual for $30 per share upon the closing of the transaction.
Direct sales for the State Auto Companies totaled $746 million in 1999. Meridian's total 1999 sales were $302 million. The combined companies will be the 48th largest property/casualty insurance group in the United States. The merger is conditioned upon approval by regulators, MIGI shareholders, and the policyholders of both mutual companies.
"Meridian's 18 state operating territory meshes with State Auto's," said State Auto Chairman Robert L. Bailey. "In virtually every respect the fit is perfect, in terms of marketing system, products, people and philosophy. We intend to utilize fully the skills and experience of the entire Meridian staff."
"We are convinced that a combination with State Auto is beneficial for all of our constituencies," said Norma J. Oman, Meridian's President and CEO. "In addition to excellent value for shareholders, no Meridian employee will be displaced as a result of this transaction. The current Meridian corporate office in Indianapolis will become the largest State Auto regional office, handling a growing volume of business. Community financial support and employee volunteerism will continue at an equivalent level. Agents and policyholders will continue receiving broad products, competitive pricing and excellent service with a financially stronger combined organization. We write the same types of business, have comparable agency forces and have similar corporate cultures. We're looking forward to what we believe will be a winning combination."
MIGI is a holding company principally engaged in the property and casualty insurance business through its wholly owned subsidiaries, Meridian Security Insurance Company, Meridian Citizens Security Insurance Company, and Insurance Company of Ohio (ICO). Business is written primarily through nearly 1,400 independent insurance agencies.
STFC is a regional property and casualty insurance holding company engaged primarily in writing personal and commercial automobile, homeowners, commercial multi-peril, workers' compensation and fire insurance. The company currently markets its products through more than 13,100 agents associated with approximately 2,200 agencies in 26 states. Products are marketed primarily in the Midwest and Eastern United States, excluding New York, New Jersey and the New England states.
Except for historical information, all other information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. The most significant of these uncertainties are described in State Auto Financial's and Meridian Insurance Group, Inc.'s Form 10-K and Form 10-Q reports and exhibits to those reports, and include (but are not limited to) legislative changes at both the state and federal level, state and federal regulatory rule making promulgation's, class action litigation involving the insurance industry and judicial decisions affecting claims, policy coverages and the general costs of doing business, the impact of competition on products and pricing, inflation in the costs of the products and services insurance pays for, product development, geographic spread of risk, weather and weather-related events, and other types of catastrophic events. State Auto Financial and Meridian Insurance Group, Inc. undertake no obligation to update or revise any forward-looking statements.
This release is neither an offer to sell nor a solicitation of an offer to buy the securities of either company, nor a solicitation of a proxy. Any such offer or solicitation will only be made in compliance with applicable securities law.