(Reuters) — Toronto-based insurance group Fairfax Financial Holdings Ltd. has agreed to buy Allied World Assurance Company Holdings A.G. for $4.9 billion in cash and stock, the companies said on Sunday.
Fairfax will pay owners of Zug, Switzerland-based Allied World $54 per share — $10 in cash and $44 in Fairfax stock. The offer amounts to an 18% premium above Allied World’s Friday closing price of $45.77, their statement said.
The merger would create a leader in property/casualty insurance, reinsurance and investments, the release said. Boards of directors of both companies approved the deal.
Allied World would operate “on a decentralized basis” within the Fairfax group, Prem Watsa, chief executive of Fairfax, said in the statement.
Fairfax said it expected to close the deal in the second quarter of 2017.
Canada-based Fairfax Financial Holdings Ltd. has signed an agreement with Sri Lanka's Asian Alliance Insurance P.L.C. to acquire the latter's Asian Alliance General Insurance Ltd., reported Daily News.