Fairfax Financial Holdings Limited and American Safety Insurance Holdings, Ltd. have entered into a $306 million merger deal, with Fairfax acquiring all of the outstanding shares of American Safety common stock for $29.25 per share in cash, the companies announced on Monday.

Separately, Tower Group International, Ltd. said it will acquire American Safety Reinsurance, Ltd., the Bermuda-based reinsurance subsidiary of American Safety Insurance Holdings, Ltd., from Fairfax for approximately $59 million.

Both deals are expected to close in the fourth quarter of 2013.

Fairfax expects several of the American Safety specialty lines groups to move to Crum & Forster and Hudson Insurance. (Hudson is part of Odyssey Re Group.)

Tower said the operations and employees of American Safety Reinsurance, Ltd. will be combined with Tower’s Bermuda reinsurer, Tower Reinsurance, Ltd. (Tower Re).

Prem Watsa, chairman of Fairfax, is sometimes referred as the “Warren Buffett of Canada” because of his investment prowess and his successful turnaround of troubled insurers. Watsa gained the reputation in the 1990s after a string of deals including C&F, Skandia America (now Odyssey Re) and TIG Holdings (which has vestiges in Fairmont)—all of which were distressed at the time.

Fairfax has also acquired carriers that were not turnaround stories. For example, the Toronto-based company acquired First Mercury Financial Corp. in a similar-sized deal (roughly $294 million) that brought the specialty insurer under the C&F Specialty umbrella.

In March 2013, a week after reporting a fourth-quarter 2012 bottom-line loss of $0.6 million, driven by a combination of catastrophe losses and prior-year reserve strengthening, the board of American Safety said it was reviewing strategic alternatives, including a potential sale.