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Brit PLC is a specialty insurer and reinsurer that underwrites unique policies to protect against risks such as war and terrorism.

Simon Dawson/Bloomberg

Fairfax Financial Holdings Ltd. is bringing the Ontario Municipal Employees Retirement System in on its acquisitions of a specialty insurance company.

The two Toronto-based groups have entered into a memorandum of understanding where OMERS would take would take as much as a 30 per cent stake in Brit PLC, a specialty insurer that underwrites unique policies to protect against risks such as war and terrorism, satellite launch failures and the cancellations of sporting events. Brit is one of the largest insurers in the Lloyd's of London marketplace, which connects global clients with insurance for complex and unusual risks.

In February, Fairfax made an offer to acquire London-based Brit in a deal valued at about $2.3-billion. Two private equity sellers owning more than 73 per cent of the company supported the deal and agreed to lock up their shares. In late March, the insurance and investments company said its takeover had been declared unconditional as to acceptances, meaning it had enough shareholder acceptances to proceed with its offer.

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Right now, OMERS has no investment in Brit shares. The new deal won't clear until after Fairfax's offer for Brit becomes unconditional in all respects, receives regulatory approvals and other conditions.

The agreement between Fairfax and OMERS also hinges on other requirements, such as those related to Brit's dividend, exit provisions and other governance arrangements.

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