Fairfax Financial Holdings Ltd. announced Monday that it plans to acquire American Safety Insurance Holdings Ltd. for approximately $306 million and, on completion of the deal, will sell American Safety's American Safety Reinsurance Ltd. unit to Tower Group International for $59 million.

Both transactions are expected to be finalized in the fourth quarter of 2013, according to statements from Fairfax Financial and Tower Group.

“We expect to enhance our insurance operations in certain specialty lines of business with American Safety's expertise,” Prem Watsa, Fairfax Financial's chairman and CEO, said Monday in the company's statement.

Upon completion of the deal, Fairfax will move several of American Safety's specialty lines groups to its subsidiaries Crum & Forster Insurance Co. and Hudson Insurance Group, according to the Fairfax statement. The acquisition is expected to generate $480 million in investible assets for the Fairfax group, the company said.

Tower Group International said in a separate statement on Monday that American Safety Reinsurance's operations and employees will be combined with Bermuda-based Tower Reinsurance Ltd. once the purchase is finalized.

“The acquisition of American Safety Reinsurance enables us to diversify and expand our specialty reinsurance business and clients as well as to accelerate our development of our newly formed Bermuda reinsurance business platform needed to support this growing business,” Michael Lee, Tower Group's president and CEO, said in the statement. “American Safety Reinsurance's specialty casualty-focused reinsurance business will complement and further diversify Tower Re's existing business, which is primarily … qualifying quota share reinsurance treaty business for Lloyd's syndicates and property retrocessional excess quota share business underwritten with select partners.”

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Mr. Lee said Tower Re also would benefit from the addition of American Safety Reinsurance's casualty underwriting and support staff, as well as its “extensive network of reinsurance brokers and specialty insurance company clients in the U.S.”

The acquisition is expected to generate approximately $40 million in premium revenue and provide a modest boost to Tower Group's earnings in 2013, “with a growing profit contribution beginning in 2014,” Mr. Lee said.

Tower Group established its Bermuda-based reinsurance arm this year with the purchase of Canopius Holdings Bermuda Ltd. The combined firms were reorganized under the new heading of Tower Group International Ltd.