PEMBROKE, Bermuda, June 30 /PRNewswire-FirstCall/ -- Allied World Assurance Company Holdings, Ltd (NYSE: AWH) and Darwin Professional Underwriters, Inc. (NYSE: DR) today announced a definitive merger agreement whereby Allied World would acquire Darwin. Darwin offers a wide array of specialty and primary professional lines coverages, which includes an industry leading health care professional liability franchise and a strong niche errors and omissions division. Darwin has also developed a business and technology model to underwrite small professional liability business, which is expected to complement Allied World's large account, specialty insurance and reinsurance strategy.

Scott Carmilani, President and Chief Executive Officer of Allied World, commented, 'Acquiring Darwin is expected to immediately enhance both companies' market profile and accelerate Allied World's expansion of its U.S. specialty insurance operations. This acquisition will more than double Allied World's presence in the U.S., particularly within the U.S. health care market. Darwin's strong reputation for both product and technology innovation will continue as a hallmark of Allied World. By bringing together two companies that have complementary product offerings, cultures and commitments to client service, we will continue to strengthen our global franchise.'

Darwin's President and Chief Executive Officer Stephen J. Sills, who has decided to retire upon the closing of the transaction, commented, 'We are gratified that the franchise we have built through the hard work and dedication of our employees and the support of our producer partners will be further expanded as part of a larger global organization. We feel certain that what we have created at Darwin will quickly enhance Allied World's name recognition in the U.S. in the specialty professional liability market. With this transaction, Darwin will continue in its evolution, now as a center of excellence for Allied World's U.S. specialty business.'

Jack Sennott, Darwin's Chief Financial Officer, who will become the Chief Operating Officer of Darwin upon the closing of the transaction, added, 'The Darwin Team is very excited about becoming part of Allied World. Darwin will reap the benefits from being part of a global company with strong ratings, a worldwide distribution network and over $3 billion in capital.'

Under the terms of the merger agreement, security holders of Darwin will receive approximately $550 million in cash, or $32.00 per share, in exchange for 100% of their interests in Darwin Professional Underwriters, Inc. The $32.00 per share purchase price is subject to a downward adjustment in the event that certain representations by Darwin in the merger agreement with respect to its capitalization are breached and, as a result of such breach, the aggregate consideration payable by Allied World in the merger is increased by more than $1,000,000.