Max Capital Group and Harbor Point Limited have signed a definitive amalgamation agreement for a merger of equals. The combined company will be renamed and rebranded as Alterra Capital Holdings Limited.

Under the agreement, holders of Harbor Point common stock will each receive a fixed exchange ratio of 3.7769 Max common shares for each Harbor Point share. In addition, both Max and Harbor Point intend for the board of directors of the combined company to declare a special cash dividend of $2.50 per share following closing to all shareholders of the combined company.

On completion of the merger, Harbor Point shareholders will own around 52% of the combined company on a fully diluted basis, with Max shareholders owning around 48%. The transaction is expected to close in the second quarter of 2010.

Following the close of the transaction, Marston Becker, chairman and CEO of Max will be president and CEO of Alterra and serve as a director, while John Berger, director, CEO and president of Harbor Point will be CEO of reinsurance of Alterra and vice chairman of the board of directors. Mr Berger will also chair the board’s underwriting committee.

Alterra will serve as the Bermuda-based holding company for the existing global specialty insurance and reinsurance operating subsidiaries of Max and Harbor Point following closing.

Mr Becker, said: “Harbor Point brings significant intellectual capital to Alterra with a highly experienced, very well-regarded reinsurance team that writes complementary lines to Max. Success in our business is built on talented underwriters.”

Mr O’Reilly, said: We believe this transaction will continue to build value for the shareholders of Harbor Point and Max. Max and Harbor Point are a compelling strategic fit, with Max adding primary insurance underwriting and multiple operating platforms to Harbor Point’s deep expertise in the reinsurance market. The companies have similar underwriting cultures and an opportunistic approach to the markets.”