Mercer shareholders OK merger with United Fire

CEDAR RAPIDS - United Fire & Casualty Co. of Cedar Rapids expects to complete its merger with Mercer Insurance Group by the end of the month.

Shareholders of Pennington, N.J.-based Mercer overwhelmingly approved the merger Wednesday. The two insurers on Nov. 29 announced plans to merge in a cash-for-stock transaction valued at about $191 million.

United Fire shareholders were not required to vote on the merger. When the deal closes, United Fire will market insurance through about 1,400 independent agents in 24 states.

United Fire on Wednesday said the merger also has been approved by the California Department of Insurance, the New Jersey Department of Banking and Insurance and the Pennsylvania Department of Insurance. The transaction remains subject to the satisfaction of other customary closing conditions.

Randy Ramlo, United Fire president and chief executive officer, said the Mercer shareholder approval and the action by state regulators should make it possible to complete the deal by March 31.

“We feel they are a good, strategic fit with our current operations,” Ramlo said. ”We look forward to the company and its employees, agents and policyholders joining United Fire.”

United Fire will finance the merger with $100 million in available cash and $125 million from existing lines of credit and a loan from the Federal Home Loan Bank of Des Moines with a fixed interest rate of 3.6 percent for 20 years.