“The companies are complimentary with virtually no overlap in their underwriting operations and have highly compatible cultures, which we believe will make integration seamless and efficient,” says Richard S. Press, chairman of Transatlantic’s board, in a statement.

Joseph P. Brandon, former chief executive of Berkshire Hathaway’s General Re Corp. will serve as president of Alleghany Insurance Holdings, executive vice president of the parent company Alleghany, and chairman of Transatlantic’s board.

Transatlantic has been courted by several companies and had an agreement in place with Allied World Assurance until the two mutually agreed to terminate the deal.

Most recently the New York-based reinsurer was in talks with Validus Holdings, who made an unsolicited offer for Transatlantic as it tried to close the Allied World deal.

However, Validus and Transatlantic could never agree on the terms of a deal, as Validus attempted to take its offer directly to Transatlantic stockholders.

The companies’ negotiations included lawsuits against each other, the latest being a suit filed by Transatlantic to block Validus’ attempt at overthrowing Transatlantic’s board.

Transatlantic stockholder will receive aggregate consideration valued at $59.79 per share in stock and cash, valued at $3.4 billion.

Based on the closing price of Transatlantic stock on Nov. 18, the company’s deal with Alleghany represents a 36 percent premium to Transatlantic’s stock price on June 10, just before the deal with Allied World was ended.

The agreed-upon price represents a premium of 10 percent to the Nov. 18 closing price.

The deal was heralded by Davis Selected Advisers, Transatlantic’s largest shareholder. The group did not have a favorable opinion of Transatlantic’s deal with Allied World. Additionally, the Kirby family, identified as having "longstanding ownership interests" in Allghany, is also on board with the deal, the companies say.

The deal is expected to close during the 2012 first quarter.