AMSTERDAM—Brit Insurance Holdings N.V. and Achilles Netherlands Holdings B.V. have agreed to terms for Achilles to buy Brit for about £888 million ($1.39 billion).

The directors of Amsterdam-based Brit, which writes multiline insurance and reinsurance through a syndicate at Lloyd’s of London and a U.K. insurance company, said Tuesday that they would recommend that shareholders accept Achilles’ offer.

Achilles, a newly incorporated company, has been formed on behalf of funds managed by Apollo Management VII L.P. and funds advised by CVC Capital Partners Ltd.

Shareholders representing 95% of Brit’s share capital must accept the deal for it to proceed. The deal also is subject to approval from the U.K. Financial Services Authority, Lloyd’s of London and the Gibraltar Financial Services Commission.

Under terms of the deal, Brit shareholders would receive £10.25 ($16.07) per share in cash plus a contingent value payment of up to 25 pence (39 cents) per share. Shareholders who were on the company’s shareholder register as of Oct. 22 will be eligible for a 30 pence (47 cents) capital distribution.

Apollo first made an offer for Brit in June. Brit rejected that and two subsequent offers, made in July, as being too low. In September, CVC joined Apollo to make an improved offer.

In takeover documents, Achilles said it believed that under private ownership, Brit “will be better able to actively manage its underwriting exposures and react more nimbly to market opportunities and challenges.”

In a statement Tuesday, Brit Chairman John Barton said the independent directors of the company believed the deal represented good value for shareholders.

Meanwhile, Brit on Tuesday reported an 8.5% fall in gross written premiums to £1.22 billion ($1.91 billion) for the first nine months of the year. The company said the decrease reflected its “disciplined approach to the renewals where premium rates are under excessive pressure.”

In its interim management statement, Brit said that on average, premium rates for renewed business increased 1.1% for the first nine months of 2010, compared with an average 4.8% increase in the same period last year.

The insurance and reinsurance markets are forecast to remain competitive for the remainder of 2010 and into 2011, Brit said.

For the nine months to Sept. 30, Brit’s investment return was £101.8 million ($159.6 million), down from £119.8 million ($187.9 million) for the comparable period in 2009.