American International Group, Inc. (NYSE:AIG) entered into letter agreement to acquire Validus Holdings, Ltd. (NYSE:VR) for $5.6 billion on January 5, 2018. American International Group, Inc. (NYSE:AIG) entered into a definitive agreement and plan of merger to acquire Validus Holdings, Ltd. (NYSE:VR) for $5.6 billion on January 21, 2018. Pursuant to the terms of agreement, American International Group will pay $68 in cash for each outstanding share of Validus. The consideration will be paid from the existing cash resources of American International Group. Pursuant to the terms of agreement, restricted shares, performance shares and restricted share unit awards will receive the same per share consideration and any dividends accrued in respect of such shares. Upon completion, each issued and outstanding series A preferred share and series B preferred share will remain as issued and outstanding series A preferred share and series B preferred shares of surviving company respectively. Each restricted company share is entitled to receive merger consideration per share. Post-completion, Validus will operate as a wholly owned subsidiary of American International Group. The transaction can be terminated by the mutual written consent of Validus and American International Group duly authorized by each of the Validus Board and the American International Group Board. In case, transaction is being terminated by Validus, Validus is required to pay a termination fee of $162 million to American International Group. Upon completion, the Directors of American International Group in office immediately prior to the effective time shall be the Directors of the surviving company. The Officers of Validus in Office immediately prior to the effective time shall be the officers of the surviving company. The transaction is subject to customary closing conditions including shareholder approval from Validus shareholders and expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction further requires regulatory approval from Bermuda Monetary Authority, the U.K. Prudential Regulatory Authority, the U.K. Financial Conduct Authority, Lloyd’s, the New Hampshire Department of Insurance, the Texas Department of Insurance and the Swiss Financial Market Supervisory Authority. In connection with its approval of the merger agreement, the Board of Directors has approved an amendment to the bye-laws of Validus (the “Bye-Law Amendment”) and has resolved to recommend approval of the Bye-Law Amendment to the shareholders of Validus. If the shareholders of Validus approve the Bye-Law Amendment, then the approval of the merger agreement, the statutory merger agreement and the merger by a majority of Validus shares, series A preferred shares and series B preferred shares, voting together as a single class, at a special general meeting in accordance with Validus’ bye-laws is required. However, if the shareholders of Validus do not approve the Bye-Law Amendment, then the approval of the merger agreement, the statutory merger agreement and the merger by a majority of three-fourths of Validus shares, Series A Preferred Shares and Series B Preferred Shares, voting together as a single class, at a special general meeting in accordance with Validus’ bye-laws is required. The transaction has been unanimously approved and recommended by the Boards of both Validus and American International Group. As of February 26, 2018, the Federal trade Commission granted the early termination notice. As of April 27, 2018, at a special meeting, the shareholders of Validus approved the merger. As of May 30, 2018, the European Commission approved the merger. The transaction is expected to close by mid-2018. The transaction is expected to be immediately accretive to American International Group's earnings per share and return on equity. The transaction will be neutral to book value and modestly dilutive to tangible book value with reasonable payback period. Titus Leung of Perella Weinberg Partners LP and Citigroup Global Markets Inc. acted as financial advisors to American International Group. Andrea Vittorelli, Xavier Loriferne, and Nicholas Lehmann of J.P. Morgan Securities LLC acted as financial advisors to Validus. Todd E. Freed, Jon A. Hlafter, Jessica Hough, Shalom Huber, Neil Leff, Patrick Lewis and James Talbot of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors to Validus. Gregory Astrachan, Laura Delanoy and Jason Koenig of Willkie Farr & Gallagher LLP acted as the legal advisors to Perella Weinberg in the transaction. Gary Horowitz, Stephen Wiseman and Kevin O'Connell of Simpson Thacher acted as legal advisors for J.P. Morgan Securities LLC. David Grosgold, John M. Vasily, Paul M. Rodel, Jeffrey J. Rosen, Elizabeth Pagel Serebransky, Peter F.G. Schuur, James C. Scoville, Kyra K. Bromley, Judith L. Church, J. Michael Snypes, Kristen A. Matthews, Dexter Hoffman, Angela W. Lee, Daniel Priest, Ashley J. Shapero and Michael G. Stern from Debevoise & Plimpton LLP acted as the legal advisors to American International Group, Inc. Innisfree M&A Incorporated acted as information agent for Validus and will be paid a fee of approximately $25,000 plus $5.5 for any telephone call Innisfree M&A Incorporated makes to individual retail investors on Validus’ behalf and reimbursement of certain expenses. Validus has agreed to pay J.P. Morgan a transaction fee of approximately $45 million, $3 million of which was payable following delivery of opinion and the remainder of which is payable upon completion of the merger. Victor Lewkow and Alexander Rahn of Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor to Citigroup.