RenaissanceRe Holdings Ltd is to acquire fellow Bermuda reinsurer Platinum Underwriters Holdings, Ltd in a $1.9 billion deal, the companies announced this morning.The firms have entered into a definitive merger agreement under which RenaissanceRe will acquire Platinum. Under the terms of the transaction, the common shareholders of Platinum will receive $76 per common share in stock and cash, or approximately $1.9 billion.RenaissanceRe expects the transaction to be accretive to book value per share and earnings per share and that the combined company will have substantial financial strength and flexibility post-closing.RenaissanceRe chief executive officer Kevin O’Donnell said: “We are very pleased to have entered into the definitive agreement to acquire Platinum. It is a well-run company and its integration with RenaissanceRe will benefit our combined companies’ clients through an expanded product offering and broker relationships. It will also accelerate the growth of our US specialty and casualty reinsurance platform and as a result, create enhanced value for our shareholders.”Mr. O’Donnell continued: “Platinum is a company we know well as we supported its formation and initial public offering in 2002. Platinum’s disciplined approach to underwriting and risk management is a strategic and cultural fit for RenaissanceRe and its book of business will be integrated within our risk management framework.“After the transaction closes, we anticipate our combined company will continue to have the very strong capital and liquidity position you have come to expect from RenaissanceRe.”The aggregate consideration for the transaction will consist of 7.5 million RenaissanceRe common shares, valued at approximately $761 million, and $1.16 billion of cash. The cash consideration will be funded through a pre-closing dividend from Platinum, RenaissanceRe available funds and the proceeds from the issuance of new senior debt.The acquisition price of $76 represents a 24 per cent premium to Platinum’s closing price per common share as of November 21, 2014. At closing, Platinum shareholders will receive a $10 per share special pre-closing dividend and will be entitled to elect to receive, for each Platinum share held, either $66 in cash, or 0.6504 RenaissanceRe common shares, or 0.2960 RenaissanceRe common shares and $35.96 in cash.All elections will be subject to proration such that RenaissanceRe issues exactly 7.5 million common shares. Following completion of the transaction, Platinum’s existing shareholders will own approximately 16% of RenaissanceRe’s outstanding shares.RenaissanceRe’s senior management team and 11-member board of directors will remain in place. The combined company will retain RenaissanceRe’s name and headquarters.For the 12 months ended September 30, 2014, the two companies had pro forma gross premiums written of $2 billion. Shareholders’ equity will increase from $3.7 billion to $4.5 billion and total cash and invested assets will increase from $7 billion to $9.4 billion on a pro forma basis. RenaissanceRe expects to achieve approximately $30 million of run-rate annual cost savings and to realize meaningful capital efficiencies from the combination.The agreement has been unanimously approved by both companies’ boards of directors. The transaction is expected to close in the first half of 2015 and is subject to customary regulatory approvals as well as the approval of Platinum’s shareholders.Morgan Stanley & Co. LLC is acting as financial advisor to RenaissanceRe in connection with the transaction and Willkie Farr & Gallagher LLP as legal counsel. Wachtell, Lipton, Rosen & Katz is acting as legal counsel to RenaissanceRe’s Board of Directors in connection with the transaction.