OREANDA-NEWS. National Interstate Corporation (Nasdaq:NATL) (“National Interstate” or the “Company”) announced today that it has entered into a definitive agreement with Great American Insurance Company, a wholly-owned subsidiary of American Financial Group, Inc. (“Great American”), in which Great American will acquire the approximately 49% of the Company’s issued and outstanding common shares that Great American does not presently own.  The merger is an all-cash transaction that values the Company at approximately $660 million, including assumption of debt in connection with the merger. 

National Interstate is the holding company for a specialty property-casualty insurance group which offers products and services designed to meet the unique needs of niche markets.  Great American is a property and casualty insurance company, focusing on specialty commercial products for businesses, and in the sale of traditional fixed and fixed-indexed annuities in the retail, financial institutions and education markets. 

Under the terms of the proposed merger, National Interstate shareholders will receive $32.00 in cash for each share of National Interstate common stock they hold.  In addition, National Interstate will pay a special dividend of $0.50 per common share upon the closing of the merger.  This represents a premium of approximately 43.7% to the Company’s closing stock price on March 4, 2016, the last trading day before American Financial Group, Inc. (“AFG”), Great American’s parent company, announced that Great American was proposing to acquire all of the outstanding common shares of National Interstate that Great American did not already own.  

National Interstate’s Board of Directors has unanimously approved (other than directors affiliated with Great American, who recused themselves from such approval) the proposed merger based upon the unanimous recommendation of a Special Committee, which was comprised of independent directors not affiliated with Great American and advised by its own financial and legal advisors.   The Special Committee and the Board each recommend that the Company’s shareholders adopt the merger agreement.

“We have come to know AFG and Great American well over the years and value our deep relationship with them,” said Anthony J. Mercurio, National Interstate’s President and Chief Executive Officer.  “Given that longstanding relationship, we are excited about National Interstate's future as a wholly-owned subsidiary within AFG's family of companies.”

The proposed merger is expected to close in the fourth quarter of 2016, subject to approval by the Company’s shareholders, including approval by a majority of the Company’s shareholders other than Great American and regulatory authorities, as well as the satisfaction or waiver of customary closing conditions.

Morgan Stanley & Co. LLC is acting as financial advisor to the Special Committee, and Willkie Farr & Gallagher LLP is acting as its legal advisor.  Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Great American.

National Interstate will file a current report on Form 8-K with the U.S. Securities and Exchange Commission (“SEC”) containing a summary of terms and conditions of the proposed merger.

About National Interstate Corporation
National Interstate Corporation (Nasdaq:NATL), founded in 1989, is the holding company for a specialty property-casualty insurance group which offers products and services designed to meet the unique needs of niche markets. Products include insurance for passenger, truck, and moving and storage transportation companies, alternative risk transfer, or captive programs for commercial risks, specialty personal lines products focused primarily on recreational vehicle owners, and transportation and general commercial insurance in Hawaii and Alaska. The Company's insurance subsidiaries, including the three primary insurers, National Interstate Insurance Company, Vanliner Insurance Company and Triumphe Casualty Company, are rated "A" (Excellent) by A.M. Best Company. Headquartered in Richfield, Ohio, National Interstate is an independently operated subsidiary of Great American Insurance Company, a property-casualty subsidiary of American Financial Group, Inc. (NYSE:AFG).