acquire Re Capital Corporation.

ZRC is 58 percent owned by Bermuda-based holding company, Zurich Centre Investments Ltd., and is 42 percent publicly held.

Shareholders of Re Capital's common stock will receive cash consideration of $18.50 for each of the 7.046 million shares in a deal valued at $124 million.

And ZRC will assume all obligations under Re Capital's existing 5.5 percent convertible debentures, due August 1, 2000 that are not converted into common shares prior to closing.

The transaction is expected to be completed within the first half of the year, but is conditioned upon the receipt of regulatory approvals and the approval of Re Capital's shareholders. Board approval has already been given. John Deere Insurance Group has granted ZRC an option to acquire, at $18.50 a share, its 3,087,598 shares of Re Capital, comprising 43.8 percent of Re Capital's outstanding shares, subject to regulatory approvals. John Deere Insurance Group has agreed to vote its shares in favour of the transaction. Mr. James E.

Roberts, president and CEO of Re Capital said: "I am pleased that the terms of the merger recognise the success Re Capital has had in creating a valuable franchise in the reinsurance marketplace.

"I believe that the combination of these companies will serve to further strengthen the broker distribution channel.'' Mr. Steven M. Gluckstern, chairman, president and CEO of ZRC commented, "We are excited about this transaction and the opportunity it presents ZRC to further strategic goals by broadening our business in a way that is fundamentally compatible with our underwriting practices.

"Re Capital, like ZRC, has been a lead underwriter of casualty and property reinsurance and Re Capital's book of short-tail casualty business is complementary to the long-tail casualty lines ZRC writes. We believe this merger represents an attractive and efficient use of ZRC's capital.'' Located in Stamford, Connecticut, Re Capital Corporation, through it wholly-owned subsidiary, Re Capital Reinsurance Corporation, provides treaty reinsurance to domestic property-casualty insurers exclusively through reinsurance intermediaries.