US based diverse financial holding company Markel has inked a definitive agreement to acquire Bermuda-based Alterra Capital in a deal valued nearly $3.13bn in cash and stock.

Based on a closing price of $486.05 for Markel common stock on 18 December 2012, the deal values Alterra at about $30.97 a share and each of its investors will get 0.043 Markel share and $10 in cash per share owned by them.

Following the merger, Markel’s existing shareholders will have about 69% of the integrated enterprise on a fully diluted basis, with Alterra’s shareholders owning nearly 31%.

Once the deal is completed, during the first half of 2013, two directors elected by Alterra’s current board will be added to the board of directors of Markel.

The transaction is subject to customary closing conditions, including shareholder and regulatory approvals.

Markel vice chairman Steven Markel said, "In particular, the addition of Alterra’s reinsurance and large account insurance portfolios will serve to diversify and strengthen Markel’s current book of specialty insurance business."

Citigroup and BofA Merrill Lynch served as financial advisor to Markel and Alterra, respectively.

Debevoise & Plimpton and Appleby offered legal counseling to Markel, while Akin Gump Strauss Hauer & Feld and Conyers Dill & Pearman acted as legal counsel to Alterra.