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ACE Reaches Agreement to Acquire Penn Millers

The Zurich-based insurance group will acquire the Pennsylvania-based agriculture insurer.

ACE Limited (Zurich) has entered into a definitive agreement to acquire Penn Millers Holding Corporation (PMHC, Wilkes-Barre, Pa.) for $107 million in cash.

PMHC’s primary insurance subsidiary, Penn Millers Insurance Company, is an underwriter of agri-related insurance in the U.S., providing specialty property and casualty insurance coverages to companies that manufacture, process and distribute agricultural products. It currently operates in 34 states.

“The acquisition of Penn Millers will provide us with an established, specialty niche business that complements our current agricultural market capabilities offered through our Rain and Hail crop insurance and ACE Westchester excess and surplus lines businesses,” Brian Dowd, Office of the Chairman, ACE Limited, says in a statement. “This acquisition offers us the opportunity to expand our agribusiness presence. We expect that the addition of Penn Millers to the ACE Group will produce results that are immediately accretive to our earnings, return on equity and book value per share. We expect to achieve a return on capital in excess of our target hurdle rate within a short period of time.”

The transaction, which is subject to regulatory approvals, PMHC shareholder approval and other customary closing conditions, is expected to be completed by the end of the first quarter of 2012.

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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