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OMERS agrees to invest $1bn in Allied World transaction with Fairfax

Published 30 January 2017

OMERS, the pension plan for Ontario's municipal employees, has agreed to invest $1bn in order to indirectly acquire about 21% of the issued and outstanding shares of Allied World Assurance Company.

The move follows the previously announced acquisition of Allied World by Fairfax and it is subject to certain regulatory approvals.

On December 18, 2016, Fairfax and Allied World announced that they had entered into a definitive merger agreement pursuant to which Fairfax will make an offer to Allied World shareholders to acquire all of the outstanding registered ordinary shares of Allied World.

The transaction remains subject to a number of regulatory approvals and certain Allied World shareholder approvals. Closing of the transaction is expected to occur in the second quarter of 2017.

Fairfax is in ongoing discussions with several additional third parties to participate in the Allied World investment. Any such additional parties will be announced if and as negotiations are satisfactorily concluded.

OMERS Insurance Investments head Sharon Ludlow said: "We are pleased to be investing in Allied World. Allied World is a market leading global property, casualty and specialty insurer and reinsurer, and is highly complementary to Fairfax's existing worldwide operations.

"OMERS investment in Allied World is consistent with our strategy to invest in high-quality companies, with strong fundamentals and a track record of value creation."

Fairfax chairman and CEO Prem Watsa said: "We are excited to be working again with OMERS.

"OMERS is a proven, long-term investor and the commitment by it will allow us to increase the cash component of our US$54.00 per share offer to Allied World shareholders and gives us the flexibility to potentially buy back their interest over 5-7 years' time."

Source: Company Press Release