8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 10, 2008

MERCURY GENERAL CORPORATION

(Exact Name of Registrant as Specified in Charter)

California	001-12257	95-221-1612
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

4484 Wilshire Boulevard

Los Angeles, California 90010

(Address of Principal Executive Offices)

(323) 937-1060

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 425 under the Exchange Act (17 CFR 240.14.a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry Into Material Definitive Agreement

On October 10, 2008, Mercury Casualty Company, a California corporation (“MCC”), the primary insurance subsidiary of the Registrant, entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Aon Corporation, a Delaware corporation, and Aon Services Group, Inc., a Delaware corporation. Pursuant to the terms of the Purchase Agreement, MCC will acquire all of the issued and outstanding capital stock of AIS Management Corporation, a California corporation, which is the parent company of Auto Insurance Specialists, Incorporated, a California corporation (“AIS”).

The aggregate purchase price in the transaction is $120 million payable at closing plus up to $34.7 million payable over the two year period following the transaction closing date depending upon growth in AIS premium volume during such two-year period, as more fully described in the Purchase Agreement.

The transaction is subject to customary closing conditions, including, among others, (i) receipt of approvals, consents and permits required to complete the transaction; (ii) the acquired company and its subsidiaries maintaining specified working capital levels at closing; (iii) the receipt of antitrust approvals, or the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; and (iv) the absence of any order or injunction prohibiting the consummation of the transaction.

A press release, issued October 15, 2008, announcing the Purchase Agreement, is attached as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Press Release, dated October 15, 2008, issued by Mercury General Corporation

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 15, 2008	MERCURY GENERAL CORPORATION
	By:	/s/ THEODORE STALICK
	Name:	Theodore Stalick
	Its:	Chief Financial Officer

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EX-99.1

Exhibit 99.1

4484 Wilshire Boulevard Los Angeles, California 90010 (323) 937-1060 Fax (323) 857-7125

Press Release 

FOR MORE INFORMATION, CONTACT:

Theodore Stalick, VP/CFO

(323) 937-1060

www.mercuryinsurance.com

For Release: October 15, 2008

Mercury General Corporation Announces Agreement to Acquire

Auto Insurance Specialists

Los Angeles, California…Mercury General Corporation (the “Company”) (NYSE-MCY) announced today that Mercury Casualty Company, its largest insurance subsidiary, has entered into a definitive agreement with Aon Corporation for the purchase of Auto Insurance Specialists, Incorporated (“AIS”). AIS is a major producer of automobile insurance in the state of California and the Company’s largest independent broker producing over $400 million of direct premiums written, which represented 14% of the Company’s direct premiums written during 2007. The transaction is expected to close in the first quarter of 2009.

The purchase price of the transaction is $120 million plus a potential earn out of up to $34.7 million, payable over the two year period following the transaction closing date. The Company plans to finance the purchase through a term loan, the terms of which are under negotiation. The Company expects the acquisition to be slightly accretive to earnings.

Mercury General Corporation and its subsidiaries are a multiple line insurance organization offering predominantly personal automobile and homeowners insurance through a network of independent producers in many states. For more information, visit the Company’s website at http://www.mercuryinsurance.com.

This news release contains forward-looking statements about the Company and the proposed transaction with Aon Corporation that involve material risks and uncertainties. Many factors, including several that are beyond the Company’s control, could cause actual results to differ significantly from the expectations described in the forward-looking statements. Among these factors are the receipt of necessary consents and approvals and the terms on which the Company obtains financing to complete the transaction. Other factors that may cause actual results to differ from the forward-looking statements contained herein and that may affect the Company’s prospects are included in the Company’s other filings with the Securities and Exchange Commission. The Company expressly disclaims any obligation to publicly release any updates or revisions to any such forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.