Nationwide Mutual Insurance Co. of Columbus, Ohio, said it has agreed to buy all of the outstanding publicly held class A common stock of Nationwide Financial Services Inc.

Nationwide Financial, also of Columbus, would become a wholly owned subsidiary of Nationwide Mutual under the deal announced Wednesday that is expected to close by year end or in early 2009.

Nationwide Mutual, which owns all outstanding class B common shares — representing 66.3% of the equity ownership and 95.2% of the combined voted power of Nationwide Financial's shareholders — agreed to pay $52.25 per share in cash for the class A stock.

The deal is expected to be valued at around $2.4 billion. Though it is subject to regulatory approval and the vote of the holders of a majority of the outstanding shares of class A and B common stock, Nationwide Mutual and certain of its affiliates have agreed to vote all of their shares in favor.

Jerry Jurgensen, Nationwide Mutual's chief executive, said in a press release that by combining the organizations Nationwide could align its products and services more easily. Nationwide Mutual is a diversified insurance and financial services firm with assets of more than $161 billion. Nationwide Financial provides investment products and services including retirement plans.

"A simpler ownership structure will open new opportunities for stronger top-line growth by attracting new customers as well as retaining current customers with a broad and integrated product offering," Jurgensen said. "It will also facilitate more effective deployment of capital across the enterprise, putting more assets to work where they can deliver the best value for customers."

On March 10, Nationwide Financial announced that it had received a proposal from Nationwide Mutual to acquire all outstanding publicly held class A shares and that Nationwide Financial's board of directors had formed a special committee of independent directors to evaluate the proposal. The deal announced Wednesday was recommended by the special committee and approved by Nationwide Financial's board.

Also Wednesday, Nationwide Financial said its second-quarter net income fell 57% to $85.4 million, or 62 cents a share, citing the stock market decline for its $41.5 million investment loss.

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