Termination fee of $250m for Axis/PartnerRe

Bermuda-based Axis Capital and PartnerRe will need to pay a termination fee of $250 million if the $11 billion merger agreement falls through.

Additionally, the agreement provides that if shareholders fail to approve the amalgamation, absent a change in recommendation of the respective board of directors, the non-approving party may be required to pay the other party a fee of $55 million.

The company, which will be based on Bermuda, expects gross written premiums in excess of $10 billion.

Albert Benchimol, the chief executive officer (CEO) of Axis Capital, will serve as CEO of the combined company. Costas Miranthis, the CEO of PartnerRe, has already stepped down from PartnerRe. Jean-Paul Montupet, PartnerRe chairman, will serve as non-executive chairman of the combined company.

The new company will have a 14-strong board of directors comprising seven Axis Capital directors and seven PartnerRe directors, including Montupet and Benchimol. Current Axis Capital chairman Michael Butt will continue to serve on the board as chairman emeritus.

David Zwiener, a PartnerRe director, will assume the position of interim CEO of PartnerRe until the completion of the transaction.