FOR IMMEDIATE RELEASE
CONTACT:
State Auto Financial Corp.
James E. Duemey
614-464-5373
Meridian Insurance Group, Inc.
Steven R. Hazelbaker
317-931-7269
MERGER AGREEMENT REACHED BY
STATE AUTO MUTUAL AND MERIDIAN MUTUAL
Columbus, Ohio and Indianapolis, Indiana (October 25,
2000) State Auto Financial Corporation of Columbus,
Ohio, (NASDAQ:STFC) and Meridian Insurance Group,
Inc. (NASDAQ:MIGI) of Indianapolis, Indiana, jointly
announced today that their principal stockholders,
State Automobile Mutual Insurance Company (State
Auto) and Meridian Mutual Insurance Company (Meridian
Mutual), have agreed to merge the two mutual
companies. In addition, outstanding publicly owned
shares of MIGI are to be purchased by State
Automobile Mutual for $30 per share upon the closing
of the transaction.
Direct sales for the State Auto Companies totaled
$746 million in 1999. Meridian's total 1999 sales
were $302 million. The combined companies will be
the 48th largest property/casualty insurance group in
the United States. The merger is conditioned upon
approval by regulators, MIGI shareholders, and
policyholders of both mutual companies.
"Meridian's 18 state operating territory meshes with
State Auto's," said State Auto Chairman Robert L.
Bailey. "In virtually every respect the fit is
perfect, in terms of marketing system, products,
people and philosophy. We intend to utilize fully
the skills and experience of the entire Meridian
staff."
"We are convinced that a combination with State Auto
is beneficial for all of our constituencies," said
Norma J. Oman, Meridian's President and CEO. "In
addition to excellent value for shareholders, no
Meridian employee will be displaced as a result of
this transaction. The current Meridian corporate
office in Indianapolis will become the largest State
Auto regional office, handling a growing volume of
business. Community financial support and employee
volunteerism will continue at an equivalent level.
Agents and policyholders will continue receiving
broad products, competitive pricing and excellent
service with a financially stronger combined
organization. We write the same types of business,
have comparable agency forces and have similar
corporate cultures. We're looking forward to what
we believe will be a winning combination."
MIGI is a holding company principally engaged in the
property and casualty insurance business through its
wholly owned subsidiaries, Meridian Security
Insurance Company, Meridian Citizens Security
Insurance Company and Insurance Company of Ohio.
Business is written primarily through nearly 1,400
independent insurance agencies.
STFC is a regional property and casualty insurance
company engaged primarily in writing personal and
commercial automobile, homeowners, commercial multi-
peril, workers' compensation and fire insurance.
The company currently markets its products through more
than 13,100 agents associated with approximately 2,200
agencies in 26 states. Products are marketed primarily
in the Midwest and Eastern United States, excluding
New York, New Jersey and the New England states.
# # #
Except for historical information, all other
information in this news release consists of forward-
looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to risks and
uncertainties that could cause actual results to
differ materially from those projected, anticipated
or implied. The most significant of these
uncertainties are described in State Auto Financial's
and Meridian Insurance Group, Inc.'s Form 10-K and
Form 10-Q reports and exhibits to those reports, and
include (but are not limited to) legislative changes
at both the state and federal level, state and
federal regulatory rule making promulgation's, class
action litigation involving the insurance industry
and judicial decisions affecting claims, policy
coverages and the general costs of doing business,
the impact of competition on products and pricing,
inflation in the costs of the products and services
insurance pays for, product development, geographic
spread of risk, weather and weatherrelated events,
and other types of catastrophic events. State Auto
Financial and Meridian Insurance Group, Inc.
undertake no obligation to update or revise any
forward-looking statements.
This release is neither an offer to sell nor a
solicitation of an offer to buy the securities of
either company, nor a solicitation of a proxy. Any
such offer or solicitation will only be made in
compliance with applicable securities law.
