Old Republic to Acquire P/C Insurer

Old Republic International Corp., the Chicago-based holding company of mortgage guaranty and title insurance operations, has agreed to buy PMA Capital Corp., Blue Bell, Pa., in a deal valued at $365 million. ORI will issue 0.55 shares of its common stock for each share of PMA, a premium of 15% to PMA's closing price on June 8, 2010. The stock portion of the deal is valued at $228 million, while ORI will also assume $137 million of PMA debt. In a statement, ORI chairman and chief executive Al Zucaro said the deal was consistent with his company's "long-term strategic plan to grow our general insurance business." Data from the American Land Title Association lists ORI's title insurance units as fourth (and smallest) among the national companies, in terms of market share at 9.3% for the fourth quarter and 7.9% for the full year 2009. Its Republic Mortgage Insurance Co. subsidiary is the smallest private mortgage insurer by market share, at 10.4% by policies in force and 11.6% for new policies written in the first quarter 2010, according to the National Mortgage News Quarterly Data Report. PMA's insurance products include workers' compensation and other property/casualty lines.