The Markel Corporation, a specialty insurer, on Wednesday said it had agreed to acquire a rival, Alterra Capital Holdings, for $3.13 billion.
Under the terms of the deal, Markel will offer 0.04315 of a share and $10 in cash for every Alterra share, representing a premium of nearly 34 percent to Alterra's closing price of $23.15 on Tuesday.
Steven A. Markel, vice chairman of Markel, in a statement called Alterra “an impressive company with proven worldwide underwriting operations in product lines that we believe are highly complementary to Markel's existing lines.â€
“In particular, the addition of Alterra's reinsurance and large account insurance portfolios will serve to diversify and strengthe n Markel's current book of specialty insurance business,†he said.
Based in Richmond, Va., Markel has patterned itself after Warren E. Buffett‘s Berkshire Hathaway, a 2008 column in Barron's noted. After the deal, Markel said it expected to write annual gross premiums of roughly $4.4 billion and to have some $6 billion in equity.
Alterra, based in Hamilton, Bermuda, is the product of a 2010 merger between the Max Capital Group and Harbor Point.
Citigroup and the law firms Debevoise & Plimpton and Appleby's advised Markel. Bank of America Merrill Lynch acted as financial adviser to Alterra and the law firms Akin Gump Strauss Hauer & Feld and Conyers Dill & Pearman provided legal counsel.
