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Principal Global Investors, LLC, a leading global asset manager and a member of the Principal Financial Group([R]) (NYSE:PFG) today announced a definitive agreement to acquire Morley Financial Services, Inc. (”Morley Financial”), a distinguished stable value asset manager with over $14.0 billion in institutional assets under management, from Columbus, Ohio-based Nationwide Mutual Insurance Company.

“The acquisition of Morley Financial represents a strong strategic fit for Principal Global Investors as we continue to strengthen our portfolio of offerings suitable for retirement investing and other long-term investment strategies,” said Jim McCaughan, CEO of Principal Global Investors. “Stable value, at more than 10 percent of the 401(k) market assets, is an important capability - one we believe baby boomers will increasingly demand as they move toward retirement and seek investment options to preserve their capital and generate income. In addition, this acquisition will enhance our ability to offer outcome-based solutions, such as absolute return strategies, which will help us further penetrate the institutional market.” Outcome-based investing, which focuses on achieving a specific return over a cash rate, has begun to displace traditional benchmark-oriented investing.

Commenting on the successful acquisition history of Principal Global Investors, McCaughan added: “We are pleased with the progress of our multi-boutique approach to managing acquisitions. Since acquiring Spectrum Asset Management in 2001, Post Advisory Group in 2003 and Columbus Circle Investors in 2004, assets under management at these firms collectively have tripled. By allowing our affiliated firms autonomy over their investment processes, while providing the marketing, distribution and technology resources they need to grow, we have formulated an approach that has greatly contributed to 150% growth in assets under management for Principal Global Investors in the last five years.”

Morley Financial will continue to be led by Jill Cuniff, who has been Morley’s Managing Director and Chief Investment Officer for the past six years. It will also retain its investment philosophy and process, as well as the company name, organizational structure and headquarters in Portland, Ore.

“The Morley transaction enables us to focus on becoming a more comprehensive leader of financial solutions as we transition to a sub-advised platform,” said John H. Grady, president and chief executive officer of Nationwide Funds Group(SM). “We have enjoyed our successful relationship with Morley Financial Services and look forward to future successes as the firm becomes a sub-adviser to Nationwide Funds.”

Financial Impact

Principal Global Investors is acquiring Morley for approximately $75 million. The transaction is expected to be neutral to 2007 GAAP earnings per diluted share (EPS) and marginally accretive to EPS in 2008.

Forward looking and cautionary statements

This press release contains forward-looking statements, including, without limitation, statements as to sales targets, sales and earnings trends, and management’s beliefs, expectations, goals and opinions. The company does not undertake to update these statements, which are based on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Future events and their effects on the company may not be those anticipated, and actual results may differ materially from the results anticipated in these forward-looking statements. The risks, uncertainties and factors that could cause or contribute to such material differences are discussed in the company’s annual report on Form 10-K for the year ended December 31, 2006, filed by the company with the Securities and Exchange Commission. These risks and uncertainties include, without limitation: competitive factors; volatility of financial markets; decrease in ratings; interest rate changes; inability to attract and retain sales representatives; international business risks; foreign currency exchange rate fluctuations; a pandemic, terrorist attack or other catastrophic event; default of the company’s re-insurers; and investment portfolio risks.

About Principal Global Investors

Principal Global Investors is a diversified asset management organization and a member of the Principal Financial Group([R]), with expertise in equities, fixed income and real estate investments, as well as specialized overlay and advisory services. Principal Global Investors manages $213.6 billion in assets primarily for retirement plans and other institutional clients.1

Morley Financial is a leader in the stable value industry. Founded in 1982, today Morley Financial oversees more than $14.0 billion in assets for a diverse group of clients, including leading banks, corporations, Taft-Hartley Funds and investment counselors across the United States.