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Property and casualty insurer Alleghany Corp. has agreed to buy the reinsurer Transatlantic Holdings Inc. in a cash-and-stock deal valued at about $3.4 billion.
The companies said Monday that the transaction values Transatlantic at $59.79 per share in cash and stock. That's a 10 percent premium to the company's $54.43 Friday closing stock price.
The acquisition will create a global specialty reinsurance company with significant underwriting diversification by product and geography, the two New York-based companies said.
Alleghany and Transatlantic had $4.7 billion in pro forma net premiums written for the year ended Sept. 30.
"The companies are complementary with virtually no overlap in their underwriting operations and have highly compatible cultures, which we believe will make integration seamless and efficient," Transatlantic Chairman Richard Press said in a statement.
Transatlantic had been courted by several businesses, receiving takeover offers from Validus Holdings Ltd. and a unit of Warren Buffett's Berkshire Hathaway Inc. , National Indemnity Corp. It also said in October that it had started confidential talks with an unnamed party.
Transatlantic provides reinsurance, which is purchased as a backup by primary insurance companies so the industry can cover big losses.
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