A.M. Best Co. said yesterday it has placed the ratings ofFidelity National Financial Group and its eight title insurancemembers under review with negative implications in the wake of itsplanned $128 million acquisition of LandAmerica.

Fidelity's purchase of LandAmerica Financial Group through astock transaction was announced Friday.

The companies said the transaction has been structured to reducethe combined debt of LFG and FNF by approximately $250 millionprior to the closing of the merger agreement. They said this willbe accomplished by FNF's title insurance subsidiaries providingliquidity equal to the statutory book value of LFG's two primarytitle insurance subsidiaries.

Best said the "transfer of liquidity" from Fidelity's titleinsurance units to help pay down LandAmerica's debt "may result inadversely impacting the financial strength and risk-adjustedcapitalization of Fidelity's title insurance members."

Best also pointed to difficulties that could be expected inbringing together any two large insurance companies, mentioning theobtaining of shareholder and regulatory approvals as factors.

Additionally, since the merged companies would comprise thelargest title insurer in the U.S., the deal will also be subject toanti-trust review, it was noted.

The review of Fidelity's ratings, Best said, is expected to becompleted by the end of the first quarter next year.