Fairfax Agrees To Acquire TIG Holdings, Inc.

TIG Holdings, Inc. has entered into a definitive agreement with Toronto-based Fairfax Financial Holdings Ltd. (Fairfax). Under the terms of the agreement, Fairfax will acquire TIG at a price of US$16.50 per share in a cash merger.

This transaction is valued at approximately US$840 million and is subject to, among other things, the approval of the holders of a majority of TIG's outstanding common stock and of the necessary regulatory authorities.

"This transaction reflects the conclusion of the previously announced review of strategic alternatives," said Jon Rotenstreich, chairman and chief executive officer of TIG. "We are pleased we are able to deliver shareholder value, organizational continuity for our employees and a stable market for our insureds."

Fairfax is a financial services holding company which, through its subsidiaries, is engaged in property, casualty and life insurance and reinsurance, investment management and insurance claims management. The addition of TIG Reinsurance to the Fairfax group enhances their strategy to become a leader in the broker reinsurance market. TIG's insurance group will continue to operate independently in its current primary insurance markets and will maintain its focus on specialized property/casualty programs.

"We are happy to be joining the Fairfax group of companies which has demonstrated a commitment to both the primary and reinsurance markets," said Mary Hennessy, president and chief operating officer of TIG Holdings. "Fairfax and TIG are a good fit because we share the same key attributes of strong producer relationships, profitable underwriting disciplines and a dedication to the highest levels of service for clients."

In an unrelated move, TIG also announced its plans to consolidate many of the activities now performed at the TIG Holdings' office in New York to its Dallas, Texas office. This consolidation is in response to TIG's commitment to managing expenses, efficiency and productivity.