Sept. 23 (Bloomberg) -- Nationwide Mutual Insurance Co., the eighth-largest U.S. personal auto insurer, is in talks to buy Pennsylvania-based rival Harleysville Group Inc. and its parent firm, said people with knowledge of the negotiations.
The companies may be days away from signing a deal, said the people, who spoke on condition of anonymity because the discussions are private. Talks could still collapse, they said. Harleysville Group had a market value of about $690 million as of yesterday. Its majority shareholder, Harleysville Mutual Insurance Co., is owned by its policyholders, as is Nationwide.
For Nationwide Chief Executive Officer Stephen Rasmussen, a purchase of Harleysville would be the first large acquisition since he took the job in 2009. Columbus, Ohio-based Nationwide would boost sales by adding home, auto and business-insurance customers in the Midwest and Eastern U.S.
Joe Case, a spokesman for Nationwide, declined to comment, as did Harleysville’s Randy Buckwalter. The combined Harleysville insurance companies had a statutory surplus, a measure of assets minus liabilities, of $1.3 billion as of June 30, according to an estimate from SNL Financial.
Nationwide generated $14.4 billion in property-casualty premiums last year, a decline of about 4 percent from 2009, according to the company’s annual report. Harleysville, based in the city of the same name, had policy sales of about $1.1 billion at the pooled companies in 2010.
Harleysville jumped $5.99, or 24 percent, to $31.32 at 4 p.m. New York time on the Nasdaq Stock Market. The insurer had declined 31 percent this year through yesterday.
Harleysville Mutual traces its roots to 1915 as an association to protect against auto theft.