Fairfax acquires specialty commercial insurer

Fairfax Financial Holdings Limited (TSX: FFH and FFH.U) will acquire the outstanding share of specialty insurer First Mercury for approximately $294 million.
The transaction is expected to close in 2011 Q1, subject to shareholder and regulatory approval.
First Mercury is a Michigan-based specialty commercial insurer focused largely on niche and underserved segments.
“The acquisition of First Mercury provides Fairfax with a well-established surplus lines and specialty platform with a strong track record,” said Prem Watsa, Fairfax’s chairman and CEO. “Operating in tandem with Crum & Foster led by Doug Libby, Richard Smith and his team at First Mercury will add considerable expertise in numerous market niches.”
There is no financing condition to consummate the transaction. Following the completion of the acquisition, Fairfax expects to hold more than $1 billion in cash and marketable securities at the holding company level, a Fairfax release says.