Fairfax Financial Holdings Ltd., a Canadian insurer, agreed to buy American Safety Insurance Holdings Ltd. for $306 million in an all-cash deal that will bring $480 million of investable assets.
American Safety shareholders will receive $29.25 per share, a 22 percent premium to the Bermuda-based insurer’s May 31 closing price, Toronto-based Fairfax said in a statement today. Fairfax plans to sell American Safety’s reinsurance unit to Tower Group International Ltd. for an undisclosed price once the deal is completed, the firm said.
“We expect to enhance our insurance operations in certain specialty lines of business with American Safety’s expertise,” Prem Watsa, Fairfax’s chief executive officer, said in the release.
The acquisition will be financed using internal resources and won’t require cash from the holding company, Fairfax said in the release. The deal is expected to be completed in the fourth quarter.
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