NU Online News Service, April 20, 11:45 a.m. EDT
Michigan insurers Auto Club Insurance Association (ACIA) and Fremont Michigan InsuraCorp Inc. have agreed to merge.
ACIA will buy all of Fremont shares for a cash price of about $67.7 million, or about $36.15 per share.
“The breadth of Fremont's product offerings, distribution of business in the western and northern parts of Michigan, long-standing relationships with independent agencies, and robust financial performance will immediately benefit the enterprise,” says Charles H. Podowski, president and CEO of ACIA, in a statement.
Sardar Biglari, CEO of Biglari Holdings, which is the parent company of Steak n Shake restaurants, had previously attempted to purchase Michigan-exclusive property and casualty insurer Fremont. A holder of nearly 10 percent of Fremont stock, Biglari supports the merge.
“I have enjoyed working with [Fremont] in our effort to realize the full value of Fremont's shares,” he says. “The merger with ACIA represents a victory for all Fremont stockholders.”
Richard E. Dunning, Fremont president and CEO, says ACIA plans to maintain the Fremont franchise and its executive offices in Fremont, Mich. Dunning says ACIA will “work with Fremont to increase its independent-agency distribution in the state of Michigan and surrounding states.”
Rating agency A.M. Best Co. says it spoke to Fremont about the transaction and evaluated the capitalization and business plan. The ratings outlook for the company remains stable.
Dearborn, Mich.-based ACIA, a reciprocal-insurance exchange, is an affiliate of AAA Auto Club Group and provides a wide range of personal-lines products.
Fremont Michigan InsuraCorp Inc. is the holding company for Fremont Insurance Co. The company provides P&C insurance to individuals, farms and small business in Michigan.
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