DOW JONES NEWSWIRES

ProAssurance Corp. (PRA) agreed to acquire fellow medical-malpractice insurer American Physicians Service Group Inc. (AMPH) for nearly $225 million, giving the largest independent provider in the U.S. a strong market presence in Texas and complementing its business in neighboring Oklahoma and Arkansas.

APS holders will receive $32.50 a share, a 24% premium to the stock's Tuesday close and an all-time high.

ProAssurance Chairman and Chief Executive W. Stancil Starnes said APS is the second-largest writer of medical professional liability insurance in Texas, a market which ProAssurance expects will be a "vital part" of its continued growth. The writer of medical and legal professional liability insurance expects the deal, expected to close by year's end, will add to earnings next year, excluding transaction and restructuring charges.

ProAssurance last month reported that its second-quarter earnings fell 25% amid investment losses and a decline in premiums.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/nae/al?rnd=osCpnGHqDrYg4OGMQohjpA%3D%3D. You can use this link on the day this article is published and the following day.

  (END) Dow Jones Newswires
  09-01-10 0943ET
  Copyright (c) 2010 Dow Jones & Company, Inc.