PartnerRe has agreed to be bought out by Italian investment firm Exor in a $6.9 billion deal.

The reinsurer has scrapped its previous plan to merge with fellow Bermuda firm Axis Capital.

Exor, which is controlled by the wealthy Agnelli family, will pay $140.50 per share including a special pre-closing dividend of $3 per share.

In its announcement yesterday, PartnerRe said the company would continue to be headquartered in Bermuda.

The further good news for the Island is that the deal is likely to mean that existing staff and management — more than 60 of whom are based in Bermuda — will be kept on.

Had Axis and PartnerRe merged, it is likely that their combined Bermuda-based workforce of around 130 would have been scaled down as the combined company was to target savings of around $200 million a year through economies of scale.

The news marks the end of a protracted and sometimes acrimonious battle for control of PartnerRe, during which the Bermuda reinsurer had accused Exor of making “outright false” statements in its efforts to derail the Axis merger agreement.

Exor has raised its offer several times since its original $6.4 billion unsolicited bid — amounting to $130 a share — in April.

Axis and PartnerRe have cancelled their respective shareholders’ meetings that had been scheduled for Friday to vote on the two companies’ merger plan.

The termination of the deal means Axis will receive a break fee of $315 million.

The agreement includes a “go-shop” period during which the PartnerRe board can solicit competing offers and enter talks with other suitors on proposals made before September 14, 2015.

PartnerRe chairman Jean-Paul Montupet said: “We are pleased to reach this agreement with Exor, which we believe is in the best interest of our shareholders. Since Exor made its initial offer to acquire the company in April 2015, the PartnerRe board has been focused on maximising value for our shareholders while positioning PartnerRe for long-term success.

“We have carefully and thoroughly evaluated each development over the past several months, and believe that this thoughtful and deliberate approach was critical to delivering a transaction that represents a significant improvement in the price and terms of Exor’s original proposal.

“Importantly, Exor is committed to ensuring that the unique culture, brand and business that our dedicated employees have successfully built over the past 20 years remain intact.”

John Elkann, Exor’s chairman and chief executive officer, said: “Today’s agreement is very positive for PartnerRe and Exor. Under our stable and committed ownership, PartnerRe will continue to develop as a leading independent global reinsurer. “Exor looks forward to working with the board of directors and the management of PartnerRe to ensure a successful path forward.”

The transaction is expected to close in the first quarter of 2016, subject to approval by PartnerRe shareholders, regulatory clearances and other customary closing conditions.

PartnerRe shares rose 2.4 per cent in New York trading yesterday to close on $139.20.