Oct 12 (Reuters) - Nationwide Mutual Insurance Co said it will pay $26 million to settle a class action and derivative lawsuit related to its $760 million acquisition of Harleysville Mutual.
The litigation brought on behalf of former Harleysville Mutual policyholders claimed that Harleysville’s directors enriched themselves as part of the merger. Policyholders did not receive a payment from the deal, it was alleged, while shareholders got a 90 percent premium.
“Given the potential cost and burden of continued litigation, Nationwide believes that settling this lawsuit is in the best interest of all Nationwide and Harleysville stakeholders,” Nationwide said in a statement.
The settlement, which needs to be approved by the Philadelphia Court of Common Pleas, was not an admission of wrongdoing by either of the companies, Nationwide said.
Nationwide announced the deal in September last year, expanding its reach in commercial insurance.