Fairfax Financial Holdings Limited (Fairfax) announced on Monday that it will acquire American Safety Reinsurance Ltd, and then ‘promptly’ sell it on to Catalina Holdings (Bermuda) Ltd.To accomplish this, Fairfax also entered into an agreement with Tower Group International, Ltd. (Tower) who were in line to purchase the reinsurer, but have agreed to terminate their right to the purchase in return for a $5 million payment from Fairfax. The two companies had announced the deal had been made in June.Fairfax describes itself as a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance, and investment management.A Fairfax press release stated: “Fairfax Financial Holdings Limited today (Monday) announced an agreement with Tower Group International, Ltd. and Catalina Holdings (Bermuda) Ltd. in connection with Fairfax’s previously announced merger agreement with American Safety Insurance Holdings, Inc., pursuant to which Fairfax agrees to sell American Safety’s Bermuda subsidiary, American Safety Reinsurance, Ltd. (AS Re), to Catalina promptly upon acquiring American Safety.“Pursuant to the terms of the agreement, Tower agrees to terminate its right to acquire AS Re in return for a $5 million payment from Fairfax and Catalina agrees to purchase AS Re from Fairfax promptly upon Fairfax acquiring American Safety.“Such transaction remains subject to customary conditions, including regulatory approvals. In addition, pursuant to the terms of the agreement, Catalina has agreed to vote its shares in American Safety in favour of the proposed acquisition of American Safety by Fairfax.”Bloomberg reported that Fairfax, owned by investor Prem Watsa, agreed to buy American Safety in June for $306 million, or $29.25 per share, representing a 22 percent premium to the insurer’s May 31 closing price.Fairfax boosted its offer to $30.25 a share on August 7.