1 Min Read
(Reuters) - Toronto-based insurance group Fairfax Financial Holdings Ltd has agreed to buy Swiss insurer Allied World Assurance Company Holdings AG for $4.9 billion in cash and stock, the companies said on Sunday.
Fairfax will pay owners of Allied World $54 per share - $10 in cash and $44 in Fairfax stock. The offer amounts to an 18 percent premium above Allied World's Friday closing price of $45.77, their news release said.
The merger would create a leader in property and 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 release.
Fairfax said it expected to close the deal in the second quarter of 2017.
Reporting by Jeffrey Dastin in New York; Editing by Peter Cooney