IPC Holdings and Max Capital, a provider of insurance and reinsurance services, have agreed to amend the terms of IPC-Max merger.

Both the parties have agreed to include cash consideration in the deal, as per which IPC shareholders will receive $2.50 per share in cash while Max shareholders will receive $1 in cash for each share post-closing.

The cash payment of $2.50 per share for IPC shareholders will be made in two phases. Initially, $1.50 per share is payable to IPC shareholders of record as of June 15, 2009. The remaining $1 per share will be paid after the completion of the transaction.

On a fully diluted basis, the shareholders of IPC and Max will own stake in the ratio of 58:42 in the combined company,

Kenneth Hammond, Chairman of IPC, said: “The agreed to dividends make an excellent transaction even more rewarding to both IPC shareholders and to all of the shareholders of the combined company. The IPC-Max transaction will create a world-class insurer/reinsurer, well positioned for long-term success and superior shareholder value creation through enhanced diversification, scale and capital.