reinsurer Terra Nova, now renamed Markel International, in a transaction which closed on March 24.

Markel said that it issued approximately 1.75 million Markel common shares and contingent value rights (CVRs) and paid approximately $325 million in cash to Terra Nova shareholders in the transaction. Total consideration was approximately $658 million, including $31.5 million of Terra Nova shares purchased in the open market.

Markel borrowed $245 million under its $400 million revolving credit facility to fund a portion of the acquisition. In addition, $175 million of Terra Nova debt remained outstanding. The acquisition was accounted for as a purchase transaction.

The revelation came as Markel reported strong earnings for first quarter 2000, well ahead of analysts' projections.

For the quarter ended March 31, 2000, earnings from core operations were $2.08 per diluted share (1999: $2.00) and net income was $2.44 per diluted share (1999: $2.61) What the company calls "comprehensive net income'', in effect the bottom line, was $2.43 for the quarter ended March 31, 2000, versus a loss of $1.39 per share for the comparable quarter in 1999.

Alan I. Kirshner, chairman and chief executive officer, commented: "We wish to welcome the Terra Nova associates to the Markel family. We are excited about the opportunities that Markel International brings to our company and recognise the challenges we will face to succeed as a global insurer.'' He continued: "The domestic insurance market is creating significant growth opportunities for Markel North America (formerly Markel Corporation), and we are hopeful to see similar opportunities in the international markets in the future.''